Brrrr Calculator - Help understanding the numbers

[Jordana OShea]

Hi all,

I'm just beginning to educate myself about the brrrr strategy. I have been looking at the brrrr calculator and I just can't figure out how the total cash invested is calculated. Could someone please help me understand?

In this particular example I used 0 costs for rehabbing as the $ will be included in the initial loan. I also assumed the same numbers for the long term and short-term loan for this example (I would also like to understand why I can't use long term finance for both initial and long-term financing...).

So the example was:

Purchase price (including rehab) 79,000

Assuming the total cash needed at purchase is $32,650 and I refinance at the ARV of 100,000 and a LTV of 65% I would be able to get 35,000 out which is more than the initial $32,650... So why is the total cash invested $18,676.88? I did look at the expenses for the first three months but it doesn't seem to add up...

This is probably a real beginner's question but I would really appreciate any help understanding this! TIA

[Jordana OShea]

@Patrice Penda

Thank you SO much for that!!! Makes sense now :)