First Buy and Hold Property Advice

[Ryan Mainwaring]

Hello,

I have found a house in Columbus Ohio and am currently pulling together some funding for the deal. I am looking to use the BRRR strategy for this property. Below are the numbers, any advice is welcomed:

House Specs - 3 bedroom, 1.5 baths, 1400sqft and no gargage

Purchase price(including closing costs) - $43,500

Rehab cost - $31,000

Holding cost - $2200

Total cost - $76700

Comps around $110,000

Monthly rent - $800

Cap rate 8.3%

[Brent Coombs]

@Ryan Mainwaring, a couple of points: 1. If you'll genuinely be able to get $110k once it's rehabbed, might it be a better flip candidate? Is it in a mainly Owner Occupier area? The reason I ask is, even out-of-state turnkey investors usually look for at least 1% gross return on their outlay, so why are THEY paying $110k for comps there? You'll BARELY get 1% gross, even at wholesale.

So to summarize point 1: be conservative in your post-rehab bank appraisal estimation.

Point 2: There's no margin for error on the rehab. As soon as you go over, you won't be able to pull out all your original deposit for your next one. Hopefully, $31k IS conservative enough? All the best!