Just closed a BRRRR deal using an LLC for tax benefits. Purchase price: $250k, rehab cost: $75k. Refi appraisal: $375k, leaving $50k in capitaal. High-risk, high-reward strategy yields strong returns in the desert soouthwest, with latest market stats showing 15% annual appreciation.
I've seen similar BRRRR deals in the desert southwest, but I'm curious about the vacancy assumptions and how you plan to mitigate potential risks. What's the projected rental income and how did you determine it? Additionally, have you factored in CAM reconciliation and tenant credit for the propetry? With a $375k refi appraisal, I'd want to ensure that the rental income can support the mortgage payments and provide a decent cash flow. Can you share more about your rental income projections and how you plan to manage the property to achieve those strong returns?
I'm intrigued by the 15% annual appreciation, but how did you arrive at that number? Is it based on loal comps or a broader market trend? Additionally, what's the pro-forma rent bump looking like for this deal, and how did you size the loan to the cap rate? Would love to see some more detailed financials to understad the ROI better.