All Forum Posts by: Rhyetta Musser

Thank you! The PITI payment would be $550 plus $85 (10%) for vacancies and repairs plus 125 (15%) for capital expenses equals $90 cash flow.

So we just finished our first flip! It's been so much hard work because we've done all of the labor ourselves. 15 weeks of working 6 days a week, 8 hours a day, neglecting home responsibilities, blood, sweat, and tears! I'm disappointed in the list price that two Realtor associates of mine have recommended: under $100,000. Once all is said and done, we should have a "profit" at closing that would barely pay us for our labor. Plus we'll have to pay taxes on the "profit" which doesn't make me happy.

Or we could keep it and do a cash out refinance--the BRRRR strategy. We would get our initial investment back, keep the property and be landlords. The cash flow should be $100/month. Here are the financials of the 2 scenarios:

Purchase price: $20,000

Rehab cost: $41,000

Holding/closing costs: $9,000

ARV: $99,000

"Profit": $29,000 (paying ourselves $15/hour for our labor would take $20,000 of this)

Tax: ? I'm not quite sure but up to $10,000

As a BRRRR, we would refinance with the bank requiring 25% DP. They're offering a 20-year fixed rate loan at 4.5%

If the house appraises for $95,000:

minus $23,750 for the 25% down payment = cash out of $71,250

minus payback for the rehab of $41,000 = $30,250

This would give us our $20,000 back which we used to purchase the property plus $10,250.

What do you all think? 

Here are a few pictures of the finished product. It was a real mess beforehand!

I'm super excited to have found a property that might be my first real estate investment! (I have owned a duplex before but it never cash flowed for us). Here are the details. If you have any input, I'd love to hear it--before I make a big mistake!

I've been approved for a HELOC for $16,500. I'm going to use that as a down payment on a single family home for sale for $55,000. (I plan to offer $40,000 and see where things go). I'm then planning to get a construction loan for the purchase price plus $30,000 for rehab to turn the single family home into a duplex. It's an older home, not very pretty, but it has 4 bedrooms and 2 baths. I can split the house in half and have a front unit and back unit. Even the yard is fenced in half. It is zoned R2 so it legally can be a duplex.

Once the purchase is made and the rehab is done, I expect it to appraise for $90,000. This is low but our area is depressed and the comparable sales run between $60K to $100K. This is why I don't see that it could work as a BRRRR. I could only pull out 67,500 when all is said and done and I might have put it as much as $85000. But the cash flow is good!

I estimate the rents to be $650 per unit ($1300 each month).

            $1300 gross rents

-$462 PITI (30-year fixed)

-$130 Vacancy & Repairs (5% & 5%)

-$234 Capital Expenses (18%)

= $474 cash flow ($237 per unit)

Am I forgetting something? Does this seem good to you?!

I need to learn more about owner financing. I have a property in SF, a duplex, I'd like to sell. It's a good property, always rented. Maybe we can work something out.