First Investments Property

[Gregory Schwartz]

Hey everyone, trying not to jump in the deep end before I can swim but my personality is to get over excited and ignore the warning signs. Hoping you all can sanity check me. 

After about 6 months and a few offers on different property types I think I've found a good niche in my area of Wilmington. Hampstead NC is a coastal town a few min from the beach, a short drive to downtown Wilmington and it boasts one of the best school districts in the area.  The avearage home sells for 250k. Nestled in the heart of the town is a upscale manufactured home neighborhood originally built on a golf course. The golf course is no longer operating but but community is still strong. With in that community I found a foreclosure with some promise.

Manufactured home built in 1985. 3/2 1500sqft. 

Asking : 60k     Looking to offer: 50k

Repairs: 30k (kitchen, master bath, flooring, paint inside and out, hot water heater)

ARV: 95K Since its a manufactured home I'm assuming the appraisal value will be low (85K)

Looking for hard money interest only for 12 months at 10%. (20% down = 16k, loan = 64k)

Rehab for 4 months, then find a renter at $950.

Cash out Refi based on 85k and a LTV 75% 64k loan (i dont get money back out of the deal but i pay off the hard money lender)

I factored in 10% property management, 10% repairs/capex, 5% vacancy rate 

Monthly cash flow $155. CoC 10.3%.

Concerns are finding a bank that will cash out refinance on a manufactured home.

Alternate exit strategy is to flip and walk away with 2-3k and a few lessons learned. 

I feel like the numbers are on the conservative side, if the rehab is under budget or the appraisal is higher then I will be able to pull cash back out of the deal. 

Thanks in advance.