Just closed a BRRRR deal in Phoenix: $250k purchase, $80k rehab, $380k refi appraisal. We invested $100k, and after refi, we're left with $30k in the property. That's a 70% return on our initial investment! High-risk, high-reward strategy is paying off in the Desert Southwest.
That's an impressive return, but I've got to ask: what kind of vacancy assumptions did you bake into your proforma, and how did you account for potential CAM reconciliation issues with your tenants? Also, what's the credit profile of your tenants - are they high-credit, low-risk leases or are you taking on some riskier tenants to achieve those returns? $250k to $380k is a big jump in value, so I'm curious to know what drove that appraisal and whether you're confident it'll hold up in the long term.