All Forum Posts by: Zac Allen

Hmmm I think I've confused myself even more...

If I bought the house for $150k and put 10k as a down payment then I would have a loan from the bank for $140k. If I then put 40k into rehabbing it and the ARV is now 240k, wouldn't that mean that I have 100k in equity? 240k - what I owe(140k) = 100k

I did forget to mention that I would be living in this home for at least a year to allow for the lower down payment. 

I've been listening the the bp podcasts all day and am now leaning more towards this being a live in flip instead. 

So much to think about and analyze but I love it! Thanks for your help @Jaysen Medhurst!

Hi @Jaysen Medhurst - thanks for the quick reply and insight! Here's what I'm looking at for numbers (roughly):

Purchase Price: $150k

Down Payment: $10K (30 yr conventional mortgage)

Rehab: $40k

ARV: $240K

If these numbers worked out as I plan, I would end up with 90K in equity. After refinancing, I would leave 20K in the deal to keep the mortgage payments at $1506 and try to rent it out for around $2000. I'm very new to all of this so I'm hoping this train of thought isn't too far off course.

I was wondering if leaving some money in a deal to ensure your rental property is cash flowing is a bad idea or what the drawbacks were. Here's an example thats similar to a situation I'm looking into. I found a house that I want to use the BRRRR strategy on and after refinancing it, the monthly expenses would be about $1800. The rent for a house like this can range from $1800 to $2100. I was thinking if I left some money in the deal that still yielded a healthy ROI and helped to keep the monthly expenses closer to $1500 to help ensure it was cash flowing, the only drawback would be that I don't have as much in the bank to BRRRR my next house. Are there other drawbacks to this adjustment to the strategy?