Hey everyone. I'm also new to BiggerPockets and parts of this calculator aren't making sense to me. I've figured out HOW the numbers are calculated, but some aren't making sense for why. I'll give my sample data if anyone that has a Pro account wants to plug it in and help. I’ll also give what is shown on the report and post my questions after.
Purchase Price: $79,000
Closing Costs: $3,540
Estimated Repairs: $23,500
ARV: $146,000
Annual Taxes: $1345
Rehab Time: 3 months
Refinance Time: 6 months
Acquisition Loan
Down Payment: $11,850
Points and Fees rolled into loan: 1,171.50
Total Loan amount: $68,321.50
Term: 30 Years
Rate: 3.70%
Interest Only: NO
Include PMI: YES
Monthly P&I: $314.47
Total Cash Needed at Purchase: $38,890
Refinance Loan
Loan Amount: $100,000
Fees paid out of pocket: $2,250
Term: 30 Years
Rate: 3.20%
Interest Only: NO
Include PMI: YES
Monthly P&I: $432.47
Total Cash Invested: $8,833.79
Rental Info
Income: $1290
Fixed Expenses:
PMI: $17
Garbage: $22
HOA: $40
Insurance: $85
Property Taxes: $112.08
Other Monthly Expenses: $67
OK!! So here are my issues.
1. PMI doesn't seem to be included in the holding costs even though I entered it. However I was only able to enter it on the fixed expenses part. The report shows $1921.67 for the Holding Costs which is exactly the (sum(fixedexpenses)-PMI)*RehabTime. (I hope my excel speak is clear!) It doesn't include PMI even though I selected that it should.
2. Total Cash Needed at Purchase. No! This number is correct for making the purchase, but it does not include upcoming holding costs! Why? It seems awfully big oversight to encourage people towards a deal without the money to handle the rehab phase. See my sample budget screenshot. If I assume I start with $38,890 as the report says I end up in trouble.
3. Also regarding the Total Cash Invested. I understand this number is
Refinance Loan - Refi fees - Purchase loan balance - Rehab budget - Closing costs
However look again at my budget vs the Report screenshot. The Reports shows Total Invested as $8,833.79. Here's mine. Due to the numbers I chose they are close, but that won't be the case if you pick different numbers.
Since the entire purpose of a BRRRR is to make it to the Refi and Repeat. Shouldn't we calculate the difference of money I started with compared to what I end up with in my bank account at the moment of the refinance. The Total Invested number does not include holding costs or income through the initial rental phase. If we're using the current balance of the Purchase Loan at the moment of refinance we should be using all the data before that right?
For anyone that made it to the end of this and offers a reply thank you so much!
