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Updated almost 5 years ago,
[Calc Review] Help me analyze this deal
*This link comes directly from our calculators, based on information input by the member who posted.
Hello, I'm developing the habit of analyzing 2 deals per day, but I'm running into a problem when trying to make the numbers work. Specifically, I'm -$300 cashflow in year 1, but then I'm positive cashflow in year 2 onwards. I'm 90% positive that this has to do with the period before the refinancing, but I want to better understand which levers to pull to make the numbers work as I analyze more deals.
I experimented with putting more money down, but year 1 cash flow is still negative. Which lever do I pull to decrease my monthly expenses?
This is my first investment property and I plan to BRRRR it and convert the garage into an ADU / jr, ADU. Running the numbers with 5% down, it seems I need to front $300/month until month 6 when I can refinance and then I'm slightly above breakeven. In year 2, I can move out, rent out the ADU and earn an extra $1800-2k/month in cash flow.
P.S. I want to include 10% for property management since I will eventually move out and want to build in that cushion. Is this wise to do on the BRRRR calculator?