Single Family BRRR Deal

[Zach Adams]

Hi All,

Today I toured my first property which was a 2 bed 1 bath foreclosure with a list price of $125k. The property is good structurally (sturdy foundation, good roof, but I will get it inspected), but the inside needs a lot of work. The largest issue is that the bathroom is connected to the kitchen so we need to relocate that as well as possibly adding a bedroom in the basement (which we will refinish). Our offer is going to be $50k (obviously this hasn't been confirmed), closing costs are $7k and I have planned a $50k renovation budget (this may be inaccurate until I get a friend to estimate costs). We expect the ARV to be $160-$180k, rent is $1400, Operating costs per month- vacancy $70, capex $70, repairs $70, taxes $140, insurance $120 which is abo $470. If we refinance after 12 months with a loan of $133k, fees $7k, 5% interest, we expect to get all of our investment back (based on the BRRRR calculator). Does this seem like a possible deal given the numbers or am I wrong somewhere? This is one of the first deals that I ran the numbers on and it seems pretty good, but I am new and slightly concerned about the amount of rehab even though I have good connections.

Thanks for any insight.