Just closed a BRRRR deal in Phoenix! Purchase price: $320,000, rehab cost: $120,000. Refi appraisal came in at $520,000. We left $140,000 in capital, a 22% return. High-risk, high-reward strategy paying off in the desert southwest, ahead of the curve in this market.
That's a solid return, but I've got to ask: what are the vacancy assumptions and how do you plan to handle CAM reconciliation? Also, what's the credit profile of your tenants? With a 22% return, I'm assuming you've got some quality renters lined up. What's the average lease term and are you factoring in any potential rent increases or decreases?
Congrats on the deal. What were the pro-forma rent bumps and expense ratios used to achieve the refi appraisal value of $520,000?