You divide that $20k by .075 and you get a boost of $260k to the valuation.Allowing you to take the property back to the bank, get a new loan with $208k of additional debt on the property, pay yourself back that investment and now you have enough cash to buy a $1M deal and use that strategy over and over while scaling exponentially.

The technicals (migration rates, job growth, tax situation, debt cost, etc) to work as well.

Trying to cut my losses as the borrower got all her unsecured debts discharged through Chapter 7.

I'm not motivated, but the homes needed work I didn't want to do or I did if for strategic tax or debt shell game reasons.

@Guillermo PerezPositives:- Equity Built: You now have $70K in equity, which is a solid result for your first deal.Cash Flow Potential: If the property rents well and covers your debt service while providing some cash flow, that’s a win.- Experience: You’ve successfully navigated a purchase, rehab, and refinance, which are the core components of BRRRR.Considerations: - Budget Overrun: Being $27K over budget highlights the importance of tighter cost estimates and contingencies.

Also, in order to get financing the lender wouldn’t allow SCI to dramatically overpay or they wouldn’t meet the debt service requirements.

The Seller needs $200k now in order to get out of debt.

They were selling on pro forma, but the market and the debt market have shifted, and it's aa lot harder to achieve higher pricing with lower rents.We've purchased over 2,000 units, and the simple answer to the question is that they are either mom and pops and run their businesses with ZERO KPIs, they do not want to risk losing tenants if they raise rents, and they don't treat their asset as a business.When you take over, it can be difficult to get rents to market if they are very suppressed.

However, be careful of taking on too much debt.  

So if you are not cash flowing and there isn’t appreciation then the only advantage you are getting is debt pay down.