[Calc Review] Help me analyze this BRRRR deal

[Derek Sperzel]

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

Please take note of the negative monthly cashflow in the above report, I'm not looking to debate if our stated expenses are accurate, just know that they are all data driven and specific to our business model.  We're more interested in whether other investors are facing the same issue that we are?  

After the rehab we have an equity position of $52,000 or 40%.  Our lender will refi the property on a 30yr note, at 75% LTV, and we'll assume a 5% interest rate.  

If we refi for the entire 75% we can get $97,5000 out of the deal, which would be $19,500 more than we initially invested, but that has our cashflow at NEGATIVE $70.90 per month.  

Using the same loan details, but lowering the LTV to 65% we'd only refi for $84k that would leave us with a POSITIVE cashflow of $1.75 (hardly exciting).  By doing that we would still have an infinite return, and take $6k more out of the deal than we put in.  Our "buy & hold" criteria states that we want a minimum of $150 monthly cashflow on all "Levered Assets."  Frankly we'd have to leave too much money in this deal to accomplish the $150 goal, but we clearly bought a large amount of equity.

I have noticed this issue with BRRRR as interest rates have risen.  Clearly some markets offer higher rent values in relation to purchase price, but are other people experiencing this cashflow problem with BRRRR at the refi stage?  Will the BRRRR strategy evaporate as interest rates creep?  Is anyone investing in a market with rental rates high enough to avoid this problem?