All Forum Posts by: Alex Smith

@Rita Lo If you're referring to the yearly projections, Loan Balance is simply the Property Value minus the Equity you've got in the property.

I finally figured it out! 

Instead of subtracting the original 80k, I need to subtract the ending balance of the original loan prior to the refi. Otherwise, we ignore the equity gained from payments on the original loan.

Turns out to be 105000 (refi loan) - 78680.34 (ending balance before refi) - 2,000 (refi loan fees) - 36,600 (initial out of pocket) = $12,280.34

Thanks for your help @David D'Errico, I'd pretty much given up until you mentioned the original loan and got the gears running.

Hi BP!

I'm trying to wrap my head around the Total Cash Invested value on the BRRRR Report. I ran a report with sample inputs and I don't see how the numbers add up.

My Refi amount is $105,000 and I've calculated my All-In Cost based on the sample data below to be:

$100,000 Purchase Price

$10,000 Estimated Repairs

$5,000 Closing Costs

$1,600 Points

$2,000 Refi Fees

$4,651.45 Holding Costs

 = $123,251.45 

To my understanding, my Total Cash Invested would be: 

$123,251.45 - $105,000 = $18,251.45

However, the BRRRR Report figure in the image below is $12,280.34

What am I misunderstanding or missing?

@Andrew Syrios @Jason D.

Thank you guys so much! Your comments were really eye-opening. It totally clicks now.

I appreciate the help,

Alex

Hi @Miles Stanley,

I'm trying to do the same thing as you. I can't seem to wrap my head around the Total Cash Invested portion. 

On your calculation, what goes into the Amortization?

Thanks,

Alex

I was expecting it to be the dollar value that fulfills the 2% rule. (I.E. an ARV of $200000, the value returned for the 2% rule should be $4000, NOT a percentage)

Instead, I see a percentage returned on the BRRRR Report example above. I'm lost in seeing how the 2% Rule of a property could yield 217.39% or any percentage for that matter.

I'm starting to worry I'm overthinking something, but there's a total disconnect.

Thanks for your reply. I'm aware of the 2% rule, but I was really wondering why it shows as a percentage on the BRRRR Report, like in the example photo below.

You're right, it should be a dollar value such as $4k/month. On the report, however, the value given for the 2% Rule is stated as a percentage itself. This is what I'm struggling to understand.

Why is the 2% Rule under the Financial Info on the BRRRR Report stated as a percentage? I expected it to be a dollar value calculated as .02 X purchase price.

Can someone please help me understand why it's given as a percentage on the BRRRR Report and, furthermore, what this percentage actually represents?

Thank you,

Alex

On the BRRRR Report, I see that the 2% Rule under the Financial Info section is a percentage. How is this calculated?

My understanding was that the 2% rule was equal to 2% of costs. So, how can the result itself be a percentage?

Thanks,

Alex

Hey guys!

I just started using BiggerPockets and was taking a look at the BRRRR report and trying to understand it. I put in some sample inputs and most of it seems like pretty straightforward math, but for the Total Cash Invested under the Refi section. I can't seem to find where this number comes from.

If anyone could help me out with a general explanation, I'd appreciate it. 

Or, if it would help, I could post the sample data I used.

Thanks,

Alex