All Forum Posts by: Vic Vega

My thinking is along the same lines as you're explaining @Randy Gillespie

@Brent Coombs Yes I agree it all needs to show a return. This is how I am processing it in my head, let me know how I may be misunderstanding it. After purchased and prior to the refi, approx a 6 month period, I will be generating a much lower COC ROI bc I will now have the full and total amount required of 86k invested. Once I then receive a majority of funds back after the refi my COC will now largely increase as my income is now calculated against a much lower amount of funds now still invested at 14.8k. I guess I'm just confused on how or why, after the refi, my COC would not go up to 26%. Thank you for the help.

@John Leavelle Interesting and thank you for the feedback. However, I think you may have misunderstood the report. COC was not calculated using any equity. In regard to BRRRR after the refi, if COC is calculated using total money invested only and not total money invested minus money received back from the refi, then Bigger Pockets needs to rework their BRRRR calculator formula. I have to believe they have it right though. That report was generated using their calculator. 

After the refi is done my investment basis is no longer 86k, it is now 14.8k. Why would I then calculate COC using an investment basis that is no longer accurate?

@John Leavelle Could you expand on that please?

@John Leavelle The cash on cash return is not based on the $86k initially invested, it's based on the $14.8k of my own cash still invested after the refinance is done.

COC = $3,870.60 / $14,800 = 0.26 (26%)

thanks @Rich Baer I will certainly look into them!

@Dan Mahoney Got it. So basically in hopes of getting quick and seamless as possible delayed financing it's best to use my own cash.

@Dan Mahoney this is theoretical for a property Im currently analyzing. When you say the money to pay cash for the property cannot be borrowed, does that mean it cannot be hard/private money/line of credit funds?

@Dan Mahoney yes delayed financing is something I need to start looking into as well. Would you mind expanding a little more on the details of that process and whats all entailed?

Thanks @William Murrell. I was also wondering if a cash out refi wasn't a quick option due to the seasoning period, perhaps a home equity loan would be a more timely option? Possibly less costly in fees as well?