BRRRR Calculator - Loan Points

[Matthew Kaiser]

Hi everyone,

I am analyzing my first deal with the BP BRRRR Rental Calculator and have a question on Loan "Points". In my calculation, it seems that the loan points apply only to the "Acquisiton Loan Amount" rather than the "Total Loan Amount" - I was wondering if this is true, and if so, why?

For example, my acquisition loan amount is $18,000 ($20k purchase price minus $2k down). The total loan amount would be $60k: $20k purchase price + $40k repairs. I input 2 “points” for the loan - it is my understanding this means 2% of the Loan amount - and the Results page shows $360 (2% of $18k) under the Loan Points/Fees category. 

In my inexperienced line of thought, it would seem if I’m borrowing $60k total, the points would be applied to that $60k rather than the $18k acquisition amount - I don’t know why the ratio of acquisition amount to total loan amount would matter to the lender. 

As I mentioned, this is my first analysis so I’m trying to understand the inputs. Thanks for your help!