Need HELP analyzing this deal please!

[Samuel Ruelke]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hey BP family! So I surely know that I am no expert in the BRRRR strategy and I'm new to using the BRRRR calc. But I know there are people here that are much more knowledgeable on this than I am! I'm trying to analyze this potential buy & hold property but cant seem to get the numbers to work... I'd really appreciate it if someone could take a look over the report and let me know if I'm doing something incorrect.

Brief overview of how I've arrived at some of the numbers: 

- Comps in the area for the ARV

- Estimated rental rates based on local similar properties (this place is currently vacant)

-Estimating the repairs on the home in a general sense: 30k per side (still need to learn more on repair costs)

Am I doing something wrong here? 

[John Leavelle]

Howdy @Samuel Ruelke

Strictly from a numbers perspective the report looks good.   But I do have a few comments and questions.

1.  Are you sure you can get a Hard Money Loan with no down payment?  Not sure why you show a surplus for the down payment.

2.  As far as learning how to estimate Rehab costs you can get J Scott’s “The Book on Estimating Rehab Costs “ available here on BP.  It breaks down the process step by step and provides a good foundation to learn from.  Have a contractor (or 2 or 3) walk the property with you and provide bids.

3. Your Cash Flow is a little lite. But, that is common with the BRRRR strateg with the increased value and mortgage. The good thing is you have stayed conservative with your analysis. Most you may have better Cash Flow than your analysis shows. Look at the 50% Cash Flow line. It is better than what you estimate. Very good indication.

4. The last thing I would say is to make sure you included all your Holding costs in the Rehab worksheet. That includes loan payments, utilities, insurance, taxes, HOA fees, and any other expenses that can occur during the Rehab period and up until the property is fully rented. The Calculator will automatically transfer any expenses you include in the cash flow analysis (loan payments, insurance and taxes). All others need to be entered by you. This is an area many new to the strategy fail to include. My average Holding costs add up to around $6,000. So you can see it could potentially blow your deal.

If your numbers are correct I would definitely pursue this deal.