Purchase price: $275,000 Cash invested: $45,000 Sale price: $410,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.

Principal Paydown: $2,441 Total Gain: $58,317 ROI: 360.32% (on $16,185 upfront investment: 3.5% down payment of $8,715 + 3% closing costs of $7,470).Year 2 Analysis Cash Flow: -$752 Home Appreciation: $6,120 Principal Paydown: $2,617 Total Gain: $7,985 ROI: 49.34%.Year 3 Analysis Cash Flow: -$375 Home Appreciation: $6,242 Principal Paydown: $2,806 Total Gain: $8,674 ROI: 53.59%.Year 4 Analysis Cash Flow: $9 Home Appreciation: $6,367 Principal Paydown: $3,009 Total Gain: $9,386 ROI: 57.99%.Based on these numbers, you’d have negative cash flow for the first three years and only break even in Year 4, assuming a 2.5% annual rent increase.Adjusted Scenario see second picture: Landlord Covers Gas and WaterIn the second scenario, I assumed the landlord would pay for gas and water at $300/month while maintaining the same 2% home appreciation rate.

But during the buyer’s due diligence, several unexpected issues surfaced, each cutting deeper into the profit I had worked years to earn.The first issue was with the water lines.

New payment is 4150 including taxes and insurance 80 waterHot water bill is 125Rents 8350Very happy with my first BRRRR

Due to this water being behind levees the water stayed up for 4 months. 

It's wise to stick your toe in the water first and fail fast in a small way if you're going to fail, right Vanessa?

Purchase price: $275,000 Cash invested: $45,000 Sale price: $400,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.

Purchase price: $275,000 Cash invested: $45,000 Sale price: $410,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.

Info from roommates on things that happened before I moved in: Worked on the plumbing while people were in the house, and the water was off for 1-2 days. 

I love going out to try new drinks and try new food.