[Calc Review] Help me analyze this deal - BRRRR attempt #1

[Ari Newman]

Hi,

I bought this tenant occupied property about two months ago. The current tenant is paying way below market rate and the house needs some updating. I intended to update the kitchen and bath, refinance and then rent it out. I paid cash using a HELOC on my primary residence. I've got a teaser rate of 3.25% until November and then it'll jump up to around 6.5% At this point, I'm all in for $103,500.

I've run the BRRR calc below, using vary conservative numbers for everything. If the projections are correct, the cash flow isn't where I'd like it to be but not the end of the world since I've purchased this property for my retirement portfolio.

View report (BRRRR)

I also ran the report as a quick flip using both the Flip Calc & Wholesale calc.

View report (flip) View report (wholesale)

Ultimately, the BRRR strategy will work best for me as I'd like to free up the cash to move on to the next project. However, I know that there will be opportunities to Wholesale or Quick Flip (& 1031 exchange) as the deal might not work well as a BRRRR. I'd love some feedback on my numbers (did I miss anything?) and overall strategy!

Thanks,

Ari

[Redgy Saint-Germain]

@Ari Newman

Since you've bought the property cash why not use " delayed financing"  to pull all your money out plus the rehab costs and continue investing with the same money.

Your ARV according to your sheet is 175k and your LTV at a conservative 70% with the delayed financing would pull 122.5K out of the deal. You would essentially have your 103k plus 19.5k for the rehab just 500$ shy of your 20k. This is an INFINITE return on your money :) and you don't have to wait 7 months. I have attached the link below check it out

https://www.biggerpockets.com/blogs/5110/42824-all-about-delayed-financing