BRRRR Calculator - Loan Points

1 Reply

Hi everyone,

I am analyzing my first deal with the BP BRRRR Rental Calculator and have a question on Loan "Points". In my calculation, it seems that the loan points apply only to the "Acquisiton Loan Amount" rather than the "Total Loan Amount" - I was wondering if this is true, and if so, why?

For example, my acquisition loan amount is $18,000 ($20k purchase price minus $2k down). The total loan amount would be $60k: $20k purchase price + $40k repairs. I input 2 “points” for the loan - it is my understanding this means 2% of the Loan amount - and the Results page shows $360 (2% of $18k) under the Loan Points/Fees category. 

In my inexperienced line of thought, it would seem if I’m borrowing $60k total, the points would be applied to that $60k rather than the $18k acquisition amount - I don’t know why the ratio of acquisition amount to total loan amount would matter to the lender. 

As I mentioned, this is my first analysis so I’m trying to understand the inputs. Thanks for your help!

You are correct, the points are on the entire loan. What you can do is manually enter the loan amount into the calculator and that should calculate it correctly.
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