[Calc Review] Help me analyze this deal

1 Reply

Goodmorning!

I'm having issues with making this report. I am trying to figure out how to input my hard money lender info for the purchase loan. I put in the information, as it is a 6 month loan, and when I do I am getting Inf% for my refinance ROI. Is this me not putting in something correctly? Or is this not checking out?

Help? First time projecting BRRRRs.

View report

Thank you so much for your help!

*This link comes directly from our calculators, based on information input by the member who posted.

Howdy @Michael Dewar

The resulting CCR is correct. Infinite is the result of having no cash left in the deal after the refinance. This is your ultimate objective. Payoff any loans and get all your cash back to "Repeat" the process.

The problems I see with your report are as follows:

1. Did you get a quote from the HML as to the terms (Down payment, Interest rate, Points, Term length)? Most HML charge Points for the loan. 6 months is a very shot time frame for the loan. Is the Lender allowing you to acquire the loan without making any kind of monthly payments?

2. Did you get a quote from a Refinance Lender? Even if the Lender says seasoning of 6 months, does the time start from the closing date, or from the date property is ready and available to live in? Your HML should really be 12 months at a minimum. Get pre-qualified for the Refinance loan prior to Purchasing the property. Most Refinance loans will have Closing Costs/Fees that are paid separately or included in the loan. Check on that.

3. Your Total Project Costs shows $83,000. Yet the Refinance loan amount is $80,000. You really have $3,000 cash still in the property. I don't know why the calculator does that. Additionally your numbers are still not right since you did not include the HML Points and Refinance Closing costs in your report. Another Cost that you may or may not have included is Holding Costs. The calculator does not have an individual input for this. Some of it is automatically pulled from your Cash Flow analysis such as HML mortgage payments, insurance, taxes, and owner paid utilities. Anything not in your Cash Flow must be added manually to the Rehab budget to account for it.

4.  The Cash Flow analysis looks decent.  However, I like a little more for Vacancy Reserves (8.34% , one months rent).