All Forum Posts by: Rajiv R.

Quote from @Tim Herman:

@Rajiv R. Loan of 230k. cash needed DP of 40k plus your closing and holding costs=$65400.Total all in is $295400 less refi of $262500=$32900 loss. Plus you will not be able to refi with a conventional loan for 6 months, so your holding costs will be more.

Thanks! I'm paying $40k back to myself though, right? I thought the idea of the BRRRR is to use that to purchase another property.

Maybe a better question is what purchase price would make this a good deal assuming rehab and ARV remain constant?

Quote from @Nicholas L.:

@Rajiv R.

yes, you're doing the math wrong because you have to pay yourself back for the down payment.

so it's $262,500 - 230,000 - 40,000 - 8000 - 3,200 - 4,200 - 10,000 = -32,900

Thanks - I’m not understanding why that’s the case. I’m sure I’m not thinking about it correctly. 

If i gave them $40k as a down payment and they loan me $160,000 and I pay off the $160,000, where does the $40k go? 

Would appreciate any input on the numbers I am including below on a BRRRR and whether I am under/overestimating anything and/or missing anything. Also, rookie question and seems like common sense but I assume once I refinance and pay the HML back, I walk away with the down payment I made to the HML in addition to cash left over from the refinance - does that sounds correct?

Based on my calculations, after paying off the HML ($230,000) and paying points and closing costs on both loans, I am left with $7,100 + I would get my down payment of $40,000 back from the HML.

I feel like I am still missing something here as getting money back + my down payment appears too good to be true. Also considering whether I can offer slightly above list price on the property to beat out any competitors but still make sure the deal works. 

Any input would be helpful - thanks!

Purchase Price: $200,000 (also list price)

Rehab: $50,000-$70,000 (likely closer to $55k with $60-70 being overestimate)

ARV: $350,000

HML Loan Amount: $160,000 + $70,000 in rehab (assuming highest rehab here)

HML Closing Costs: $8,000 (approx.)

HML Points: $3,200

Holding Costs (2 months): $4,200 (approx.)

Refinance at 75% of ARV: $262,500

Closing Costs: $10,000

Pay Back HML: $230,000

Total Loan/Holding Costs: $8,000 + $3,200 + $4,200 + 10,000 = $25,400

Cash Out: $262,500 - $230,000 - $25,400 = $7,100

Quote from @Nicholas L.:

@Rajiv R.

this will not work as a BRRRR

if the ARV is 275K, you would need to get it for way, way less than 220K

you'll be upside down trying to pay off the HML

Thanks I ran numbers and I see now I’d have to get it for $35-40k less. Thanks!

Sorry accidentally bumped this and realized it was from 6 years ago! 

My question was people talk about getting their down payment out of a BRRRR but what about closing costs and other expenses related to the purchase?

List Price: $215,000

Offer: $220,000 

Rehab Budget: $30,000 (overestimate)

ARV: $275,000

Looking to use hard money to acquire and rehab and refinance into conventional or DSCR. The numbers on the rental may be a bit tight but it should cash flow a small amount with potential to refinance to a lower rate in the future or sell once rented.

Please feel free to provide any thoughts. Thanks!

Newbie investor looking for my first BRRRR.

Is it generally true that once a property is on MLS, I will end up having to pay list price due to competition?

Of course excluding those properties that may clearly be listed well above where they should be. 

Quote from @Jack Tulloch:

Hey Rajiv. Bigger Pockets has some recommended lenders under the NETWORK tab you can reach out to. 

Thanks! I took a look but would have liked to hear any personal experiences too. Looks like east street is on the list too. Would be happy to connect either with you or the appropriate person there to find out about the process, terms etc. 

Hi! I posted elsewhere but found this section so thought I’d do the same. Can anyone suggest a good hard money lender in RVA or nearby that would be good for a first time investor? Thank you!

Can anyone in Richmond/Central VA suggest a good hard money lender? I have researched, but it would help if anyone can suggest one they've worked with previously and one would be good with first time investors. Thanks!