[Calc Review] Help me analyze this deal

[Corbett Brasington]

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

I think I did something wrong....says my COC return is 64%

My full review is here.  What am I missing in this analysis?  This is my first in depth review.

Get our reps in: Deal Analysis Rep 1

Goals:

• · Near Term:
  • · Learn the business. I really like the concept of restoring something that was broken and profiting from it. So, fix and flip and BRRR are very appealing to me. I want to fix and flip or BRRR at least one property a quarter starting Jan of 2022. Big audacious goal is one a month.
• · Develop Systems to serve me.
• · Start to Network and build my brand. Add value where I can while learning myself, like this!

• · Long Term: 50 units held within 5 years to replace 10k+ a month of income.

Constraints

1. I do not want to be a GC and manage sub-contractors. I also do not want to deal with the liability of subs getting hurt.
2. I do not want to be a property manager.
3. Total Cash: 160k total. Cash: $40,000, 401k Cash out (after taxes and penalty): $35,000, HELOC: $85000 limit
4. Initial Rehab Estimation (are these numbers still relevant? What are you all experiencing after the fact? I am using this approach b/c people cannot see the property via a walk through. However, if people like this I may go on site to properties and take pictures and videos and share them so a breakdown method approach can be applied for estimating rehab)
   1. Low : $10 per Sqft
5. Medium : $17 per Sqft
6. Large: $26 per sqft

Assumptions

1. If I was to make an offer a deep dive due diligence on estimate would be completed.
2. The house would be bought with cash so that BRRR strategy could be applied.

Questions to Answer

1. Is this an area I want to buy and hold? Why/why not?
2. What purchase price would I require to make an offer?

Disclaimer: Real listing and addresses will be posted so we can all learn. They are free game. This is for educational purposes only.

Property to Analyze

Location Criteria: Is this an area I want to buy and hold? Why/why not?

• - Schools: (OK) Slightly Above Average (See Zillow “Great Schools” Section). Not a risk.
• - Crime:
  • o Sex Offender Search: (WARNING)
    • There are 2 moderate risks Sex offenders of a minor, both age 13, within .25 miles of the home. How much of a risk is this to real estate investing?
  • o All Crime (GOOD)
    • No Crimes
  • - Amenities
    • Of Home
      • ORIGINAL HARD WOOD FLOORS
    • Nearby (GOOD)
      • Close walking distance to a very in nice park.
        • · This 17-acre park offers something for everyone. From basketball to swimming - to playscapes to walking trail - we’ve fit it all in - in this busy community park. The park is also home to many city events and festivals throughout the year.
      • § Nearest Grocery Stores
        • · 4 miles (10min drive) to HEB
      • · 4 miles (10min drive) to Walmart
      • - Comparable Rent
        • o Rentometer.com says that $1400 is average.
      • o Comparable properties sold: Only thing I have to do this really is Zillow or trulia.
        • § A property down the street street sold for 189k based on price history in trulia. It was 1440 sqft 3 bed 2 bath. Putting it at $131/sqft.
      • - Neighborhood:
        • Does the HAO have a limit on rentals? Will look if the numbers make sense.
      • - Economic Indicators (GOOD)
        • Very close to Randolf Brook Airforce Base 3 miles away, 10 min drive.
      • - ??Am I missing any criteria for location?

What purchase price would I be willing to pay for this?

What level of rehab is needed? Medium to High, home is old, major systems likely need to be replaced. Going to assume $23/sqftr (no idea how good this number is at this point).

That would put my estimated rehab costs at $28,980.

Assuming I can get what the house down the street got at $131/sqft that would but the ARV at 160,060. A cash back refi at %70 is $115,425. Less the repair costs above brings max purchase price in cash to $86,562.