18k stays in the deal. Does that kill it?
Numbers on the one I keep re-running. Purchase 142k, rehab budget 38k, closing and holding call it 9k, so all in around 189k. My comps put the after-repair value near 235k. If the refinance lender goes to 75 percent of that, the new loan is about 176k, so I get back 176k of my 189k and 13k stays in the property. Add the appraisal coming in a little light and it's 18k stuck.
Every BRRRR explanation I read says the point is you get all your money back. Mine doesn't. So either my numbers are wrong, my expectations are wrong, or the deal is wrong, and after six weeks of staring at it I honestly can't tell which.
The rent side: 1,950 a month, taxes and insurance about 480, and at current quoted rates the payment on 176k is a lot more than I modeled when I first built the sheet last year. Cash flow lands somewhere near 180 a month before any vacancy or repair reserve, which means it's basically zero once I reserve properly.
What I actually have is a seller who will move on price a little, a contractor bid I trust maybe 80 percent, and no refinance lender committed yet. The decision in front of me this week is whether to get the refi terms in writing before I go firm on the purchase, or whether that's backwards and I should tie up the property first. I've been in analysis mode long enough that I can no longer judge which risk is bigger.