Calculator: How Does It Include Repairs?

Question

If I am taking out a loan for repairs, how does the BP calculator include this in my "monthly cash flow" and "cash-on-cash ROI"?

Does the calculator know I am taking a loan for repairs (in which case, I will enter the repair estimate in the "Estimated Repair Cost" field)?

Or does the calculator think I am paying for repairs with cash out-of-pocket (in which case, I will add the repair amount into the purchase price, and adjust the down payment accordingly)?

Mindy Jensen · Answer

@Fredrick Hock, repairs are assumed outside the loan, so if you'd like to include them, add them to the purchase price.

Fredrick Hock · Answer

Thank you @Mindy Jensen and @Eric Gamble!!

Eric Gamble · Answer

@Dave Meyer greetings!

I wanted to pull you in on this thread because I recently watched your "Deal of the Day" video on the analysis of the Lewiston, ME 4-unit property, using the BP Rental calculator.

The question is - How should we use the calculator as it pertains to including repair costs into a loan (i.e. to better understand a Hard Money loan)

Many thanks,-Eric

Eric Gamble · Answer

@Fredrick Hock I have come to the same conclusion. I have been searching the forums for an answer. So, I think I will include @Mindy Jensen and @Brandon Turner on this discussion. Because I have not found an answer to our question.

Mindy & Brandon, many thanks for everything you are doing for the community!

Now that I have run the various calculators a number of times and am using the BRRRR Calculator for a real deal, I have 2 questions:

• If repairs are being financed (HM / PM / Conventional) how should these be placed into the calculator?
• If the repair costs currently need to be included in the original loan amount, might a radio button be added to indicate if the repairs should be included in the loan?

Many thanks!

-Eric

Calculator: How Does It Include Repairs?

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