The Bank Should Pay Me To Take The Property

[Eric Gamble]

I have heard about these types of deals, but never ran across one until now. I will give color to the deal below. However, my question for the forum is not about the deal, but about the BRRRR Calculator.

How Does The BRRRR Calculator Compute/Solve/Calculate the ARV in the FINANCIAL INFO Section of the Report?

About the property:

• Foreclosure: Bank Asking 86,900
• ARV: 105,000 (my calc giving the area and rental rates)
• Property Characteristics: SFH (ranch) 1970s, 2bed, 1bath, 1274 sqft, wood paneling throughout
• Rehab Budget: $48,000 (reconfig to: 3bed, 1.5bath [fiberglass insert], rewire, fixtures, outlets, kitchen [laminate counters])

The BRRRR Calculator is telling me the ARV is $50,250 (still would like to know how this calculated). So, I am thinking I should offer the bank a price that is 50% of the BRRRR ARV calculation (approximately $25,125), because 25,125 + 48,000 = $73,125. Using this number as a projected all in costs, it would put me at 69.64% of the $105,000 ARV.

Even at this number, with rents averaging $875/mo, I would only be at 1.19% of the all in price (monthly)

Your thoughts would be greatly appreciated!