Contractor · Bend, OR · Member since 2018 · 33 posts · 12 votes
I ran some very simple numbers as a test to get acquainted with the fix-and-flip calculator. I seem to be messing up on the loan section. I have it at 100% LTV ($200,000) at 12% and amortized for 1 year. The result is a $17,769.76 per month. I must not be understanding the amortization aspect? I assumed that is the life of the loan, meaning it should be $24,000 for the year, $2,000 per month, and a total of $8,000 for the calculated 4 months of holding. What am I missing or not understanding?
Contractor · Bend, OR · Member since 2018 · 33 posts · 12 votes
7y
@James Galla right that makes since. It essentially recalculates every month as opposered to annually.
My big issue is that the calculator states that 19k is paid out every month.
That $19,000 is the interest paid over the course of a full year, correct? Which should give me a monthly payment of ~$1,600. Is this a software issue? Or am I’m missing something obvious?
Attorney · Akron, OH · Member since 2016 · 535 posts · 389 votes
7y
I'm not too sure where you are getting the $19k figure from (there is no figure identified at $19k on the report you provided in the thread). The one you cited to states you have a mortgage payment of $17.7k. I'd take a look at this calculator, which also supports the $17.7k figure.
Contractor · Bend, OR · Member since 2018 · 33 posts · 12 votes
7y
@James Galla I apologize. I was responding from my mobile and didn't check the original mortgage amount. $17.7k is correct.
I now see the error of my ways though. Seems that most hard money lenders (which is the scenario I was calculating for) lend on interest only payments until the end of the loan. I missed that toggle in the calculator which is why I was ending up with 19k per month instead of $2,000.