BRRRR Success

@sfr_sammy

Equity 40·Posted 2w ago

I just closed a BRRRR deal in Phoenix that's a textbook example of high-risk, high-reward. Purchase price was $280,000 with a rehab cost of $120,000, totaling $400,000 invested. After rehab, the property appraised for $520,000, allowing me to refinance and pull out $380,000 in cash, leaving $20,000 in capital. That's a 95% return of my initial investment. With rental income projected at $2,500/month, this property will cash flow $1,000/month, a 5% monthly return on my remaining $20,000. Market stats show the Phoenix area is still aheaad of the curve in terms of appreciation and rental demand, with a 10% year-over-year increase in median sales price. This deal highlights the potential for high returns in the desert southwest, where smart investors can capitalize on the growing deamnd for housing. I'm excited to repeat this process and continue to build my portfolio of high-performing properties.

2 comments

@txrei_pro·2w ago

I'd love to dig deeper into your pro-forma projections. You're assuming a 5% monthly return on the remainng $20,000, but what are your expense ratios looking like? How did you arrive at the $2,500/mnth rental income, and are you factoring in any potenttial rent bumps or concessions? Additionally, what's the loan structure on this deal, and how did you size the loan to the cap rate? A 10% year-over-year increase in median sales price is impressive, but I'd like to understand how you're underwriting the potential risks and downsides. Can you share more details on your undewrriting process and how you're stress-testing this investment?

@flipped_out·2w ago

That's a great return, but what are your vacancy assuumptions and how did you account for CAM reconciliation? Are your tenants creditworthy, and what's the lease term? I'd love to see a breakdown of your expenses to understand how you're achieving that 5% monthly return.

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