Good BRRRR deal? Chicago 2-Flat with room for improvement!

[Edouard Pierre]

Hello all, 

I'm looking to purchase my first personal BRRRR deal in Chicago and I'm a real estate agent. Here are the specifics:

Property Type: 2-flat sold via HUD. (First Floor: 2bd/1bath & Second Floor: 3bd/1bath)

Listing Price: $299,900 - very good/competitive price

Closing costs: $7200 

Commission as "buyer's agent": $5800

Taxes: $4,582 with no exemptions for the moment 

Repair Cost: $15K

Rental Income for 3bd/1bath: $1300-1500 (Chicago's rental market is skyrocketing)

Insurance: $3000/yr

Mortgage: $2000 including insurance/taxes

The basement can be finished and the rentable 3bd/1bath could duplex up into the massive unfinished attic. These are both expenses that I have not put together or factored in yet, however they're a possibility in the long run. What other things do I need to factor into my calculations at this point or how/which calculator do I use on BP to analyze this deal?

Thank you!

[Crystal Smith]

If the repair costs is estimated by HUD then you probably should consider having someone else do the estimate. We've found that HUD estimates tend to be low for repairs especially when considering what kind of quality you really want in the property.

You need to factor in any potential CAPEX, maintenance, common area utilities, water & potential reserves (Reserves are really there to cover CAPEX items)