Updated almost 9 years ago on . Most recent reply
BRRRR Calculator question
First off, I think this question fits into this category.........
I watched the webinar Brandon Turner did on Success Using the "BRRRR" Strategy. Great and informative webinar!!
After the webinar I started to really analyze a handful of properties using the BRRRR Calculator on the site and I got hung up on something. I decided to go watch Dancing with the Stars instead of solving the issue, but there was no Dancing with the Stars tonight so here I am.
Brandon ran a scenario where the listing price of a house was $49,000, estimated repair costs of $20,000. Got a loan from a private money lender for $70,000. This number makes complete sense to me.
The ARV of the house was $95,000 and the Refi Loan amount Brandon put in was $65,000 which is roughly 70% of the ARV. Got that and makes sense once again.
Here is what doesn't make sense to me. The private money lender loan was $70,000 and the Refi loan was $65,000. Shouldn't the Refi loan cover the cost of the private loan plus interest and points? Does this point matter in the big picture, and you just pay the extra $5,000 out of your pocket and move on? Any advice would be greatly appreciated.