Feedback on My Deal Analyzer

7 Replies

@Aaron K. Generally holding costs are taxes, insurance, loan payments, HOA fees, and utilities. So those inputs and the holding period which would include the renovation period and the listing period would make up the holding costs. The only one not listed which would actually effect this is the utilities. I left those blank because it reflects the BRRRR method where the tenants would pay for all utilities. As for the financing, all are inputs based off of the loan I can receive. This is an excel workbook so there is a loan amortization schedule that the payment is being pulled directly from based on the inputs. I wish bigger pockets would allow me to upload the whole workbook.

The problem is that banks won't give you a fix and flip loan at 4% and most won't give you a rental loan at that either. Fix and flip is usually through a HML closer to 10-12%. You also seem to be including the rehab budget in the loan which banks generally don't do unless it is an FHA 203k. Property taxes fluctuate depending on where you are 1% may be fine but in other areas it is not. 3 months holding time is optimistic and I don't see realtor commissions anywhere.

Originally posted by @Aaron K. :

The problem is that banks won't give you a fix and flip loan at 4% and most won't give you a rental loan at that either. Fix and flip is usually through a HML closer to 10-12%. You also seem to be including the rehab budget in the loan which banks generally don't do unless it is an FHA 203k. Property taxes fluctuate depending on where you are 1% may be fine but in other areas it is not. 3 months holding time is optimistic and I don't see realtor commissions anywhere.


I am a real estate agent so that is why I don't have real estate commissions in there. If I was to have another agent sell it I would add it into the closing costs. I don't know if your banks are different but my mortgage guy will give me a loan for the house at 4% and the loan for the repairs at 5-5.5%. so to make things easier I took any average of the loan percentage and put that in there. I also have a hard money lender who does fix and flips for 8%. As for the taxes right now I am only investing in Richmond and so the one percent is to reflect actual Richmond taxes. This is a excel workbook so everything can be changed based off of the property I  am looking at.

 

Originally posted by @Aaron K. :

The problem is that banks won't give you a fix and flip loan at 4% and most won't give you a rental loan at that either. Fix and flip is usually through a HML closer to 10-12%. You also seem to be including the rehab budget in the loan which banks generally don't do unless it is an FHA 203k. Property taxes fluctuate depending on where you are 1% may be fine but in other areas it is not. 3 months holding time is optimistic and I don't see realtor commissions anywhere.

Thank you for the feedback it is making me think of what I can do to improve my model like adding separate loans for the house and the repairs.

 

@Aaron K. Very true. Definitely something I had overlooked. I'll up my closing costs depending on the deal size. In my area 5k is the cost to purchase but I need to add another item for closing costs when selling for fix and flip. I should only keep the 5k for the BRRRR strategy though.

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