Hidden Costs

I recently closed a BRRRR method investment in a suburban area of Louisville, where an unexpected expense caught me off guard. The property's purchaase price was $120,000, with a rehab scope of $30,000, and holding costs of $10,000. The after-repair value was estimated at $180,000. However, during the rehab, we discovered a hidden termite damage that added $8,000 to our costs. This surprise epense reduced our projected net profit from $20,000 to $12,000. It's a reminder that thorough proerty analysis is crucial, especially in local markets where termite damage can be prevalent. As a seasoned landlord, I've learned to always budget for the unexpected and factor in local market trends when evaluating potential investments.