Need help on BRRRR deal

[William S.]

I'm struggling on the refinance portion of this potential BRRRR deal below:

Purchase Price: $30k cash (10% private money interest only)

Rehab: $30k (LOC/credit cards). I do full rehabs, plumbing, roof, electrical, windows, etc

ARV: $80k

All in: $60k plus some holding costs/interest

Refinance 75% LTV = $60k 30 year fixed mortage @ 4.5% (no money out of my pocket)

Rent = $1,050/m

Mortgage = $304/m

Insurance = $50/m

Vacancy = $87.5/m

Taxes = $271/m (ridiculous Milwaukee taxes)

Repairs = $50/m

CapEx = $150/m

Property Management = $105

Lease Fee = $42/m

Net Cash Flow = -$9.50/m

So after the refinance I am negative. Why? What is wrong with the deal? Is it due to refinancing an amount that leaves me no cash flow?

[Alex Deacon]

@William S. I buy 4-5 properties a month and its hard to walk away from some deals. You just want to make them work. I do still make mistakes and buy when my heart says yes and the numbers say no. If you are a negative cash flow on a 30 year mortgage that's a sign to walk from the deal. The only time I would consider such a deal is when I see significant economic change happening in the area and higher appreciation than the average. I hope that makes some sense for you.

Could this be a possible flip for you? Maybe turn around and Make $10,000 profit and take that and reinvest it down the road.