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Updated about 4 years ago on . Most recent reply
First Deal Analysis Check
I am a new investor. I binge read Rich Dad Poor Dad and I have been fanatically listening to BP content on youtube for a month now. I plan to BRRRR my first deal and below are some of the data points I am using.
This is the property in question! https://www.redfin.com/TN/Dick...
It is in Dickson, TN and the asking price is 99k. I personally know the seller (I grew up in town) and I believe I can get it for 85-90k. I plan to spend 20k on touching up drywall, redoing cabinets, countertops, and appliances, and doing new floors. My brother in law is a contractor and I am a seasoned construction worker / handyman so I can do 99% of the rehab myself. I believe rent could be 1k a month as the old tenant was paying 950. Which would be around 250-300 cash flow a month. I plan to do a hard money loan at 95% of rehab + purchase price to buy the property. Is the 95% loan an aggressive assumption? My mentor has a hard lender that does 90-100% financing for him. I also would get a line of credit with a local bank for the rehab. One big question I had was if I can use a line of credit in place of the 5% I am liable for (hard money has other 95%) and to cover the interest of the loan until the deal is refinanced.
As for the refinance process, my mentor has a credit union in Alabama that will do an 80% LTV (already confirmed this with the union). My estimate is that a rehab would bring the value to $150k. As I am very new I am curious if this is a steep assumption or if there is a better way to calculate ARV. To get all my money out and have no cost I need it to be valued at at least $138k. Math in image below.
Any information, tips, connections, or critiques would be greatly appreciated! Thanks in advance for all you help!
Most Popular Reply
@Tyler Pino Was there any particular reason you decided to not touch it? Want to make sure I am not overlooking something. Also if you have time to meet at house blend sometime I would love to pick your brain. I am always looking to meet new people and learn!