First Offer Accepted. Check out these numbers!

[Josh O'Hearn]

View report

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

Just had my first offer accepted on a property owned by the VA. The property is assessed at $120,000, my offer of $42,500 was accepted yesterday. The property will take $25,000-$30,000 in renovations with comps for a 4 bedroom in the area in the $140,000-$155,000 range, which should yield significant equity to put towards another deal. The house will rent for around $1200 a month and the renovations will take around 3 months as I plan on doing the majority of the work myself.

I am hoping for a quick closing with a cash purchase, looking like 2-3 weeks. Please look at my numbers and give feedback. Thank you!

[Leigh C]

25-30k in renovations.   What would a contractor charge?     Looks like a sweet deal, but don't forget to pay yourself for contracting work done when you crunch these numbers.        

[Leigh C]

25-30k in renovations.   What would a contractor charge?     Looks like a sweet deal, but don't forget to pay yourself for contracting work done when you crunch these numbers.        

[John Leavelle]

Howdy @Josh O'Hearn

You might want to look at Flipping this deal vs BRRRR. The Cash Flow analysis is way too optimistic. You did not include Vacancy reserves, Property Management, and your 3% for both CapEx and Repairs are too low. Here's how I would analyze it:

Vacancy - $95.1 (one month rent) 8.34%

PM - $115 (Even if you self manage) 10%

CapEx - $80.5 (7%)

Repairs - $92 (8%)

Total = $ 382.60

Total Expenses = $382.60 + $266.67 Taxes + $70 Insurance + $526.09 P&I = $1,245.36

Cash Flow = $1,150 - $1,245.36 = - $95.36 (Negative Cash Flow)

Also you did not include Closing costs for the Purchase and Refinance.  What about Holding Costs?

[Eric Adobo]

Gobmint just giving my 💰 away again.