Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 9 years ago on . Most recent reply

User Stats

24
Posts
3
Votes
Jerod Smith
  • Investor
  • Kellyville, OK
3
Votes |
24
Posts

First BRRRR deal (hopefully)

Jerod Smith
  • Investor
  • Kellyville, OK
Posted

I've read so many BRRRR threads that I hope I have a handle on this and ready to do my first deal. Would love input.

  • $46k cash on hand. 
  • 2/1 ( could be 3) SFH offering $30k in recovering, popular neighborhood.
  • Rehab cost $20k
  • ARV is $70k

The plan:

  • Use HML (12.75% 15yr, 20% down, 1% per $1k upfront fee, 1%/balance early payoff fee inside 1 year,) Initial purchase = "approx" -$24,000 (incl $6k down).
  • My cash for the rehab. = -$20,000
  • Appraisal = -$400
  1. total in- $44,000 ($26,000 mine)
  • Rent ASAP $800/mo (approx $2400 net for 6 months)
  • In 6 months, Refi 70% of ARV = $49k

Questions:

  • Am I crazy for taking the 12.75%?  Is there a better way? My thought for keeping more cash on hand was a safety net because it being my first deal.  In addition, the traditional bank I've used on to 2 other deals seemed a little timid of my strategy. So, I went to somebody who was willing to do it. 
  • doesn't this scenario put me back where I started with my cash in hand?
  • Is it possible to do a home equity immediately after rehab to cash out early?  What are the details of that route? (Cost, rules etc). 
  • Other thoughts?  Things I'm missing?

*please excuse any errors in the math. It's late. ;)

    Loading replies...