[Calc Review] Help me analyze this deal

[Cole Britting]

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*This link comes directly from our calculators, based on information input by the member who posted.

How do the holding costs get factored in to a deal? When you use private or hard money to do a BRRRR deal, all these costs accrue (interest, insurance, taxes) when you are doing the rehab and unable to obtain cash flow. Who pays for these costs? Does the bank cover them when you refinance or do they come out of pocket?

For example, in my deal I have almost $15k in holding costs, but the deal comes out to say I am only invested in for $6,500 of my own cash even though the refinance will not cover all of my initial loan.

What am I not understanding about this process?

[Jacob Sampson]

Is the private lender covering the entire purchase and rehab or are they covering your down payment and a bank is covering the rest?

The different holding costs will be handled differently and should be discussed with your lender.  For example, part of holding casts is utilities.  Those will have to be paid every month, either out of your pocket or your lenders pocket.  That will need to be discussed with them.

Interest may be deferred or charged each month.  You will need to discuss with your lender.

Taxes usually due every 6 months or once a year.  They have to be paid when due.  Again, either out of your pocket or the pocket of your lender.  Discuss with them.