Buy & Hold Calculator Question

3 Replies

Basic Purchase Info

  • Purchase Price: $89,900
  • Closing Costs: $32,101.80 (covered by Private Loan - see below)
  • Est. Rehab Costs: $8000 (covered by Private Loan - see below)
  • Remaining Mortgage: $57,400 (covered by Owner Balloon Note & Mortgage - see below)

I am purchasing a buy and hold duplex, as well as covering rehab costs, through the following:

1. Private Loan | covers closing & estimated rehab costs

  • Loan Amount: $40,000
  • Amortization Period: 30 years
  • Loan Term: 5 years
  • Interest Rate: 6% 

2. Owner Holding Papers | covers remaining mortgage

  • Loan Amount: $57,400
  • Amortization Period: 15 years
  • Loan Term: 5 years
  • Interest Rate: 5% 

My main question is seeing that the entire cost of the mortgage, closing and rehab costs are not coming from any out-of-pocket expenses from me personally, will that effect how I fill out the calculator information?

This is only my second property and really the first time using the calculator with true detailed information.

Thanks in advance.

First step, throw the calculator away.  Because....if are you plugging distorted numbers in and want the calculator to tell you if it’s good deal or don’t really know what the result means.  I say this partly because there is no way your “closing costs” are $32k.

The return on “no money down” is going to be an infinite %, either positive or negative.

Look at the actual NOI, then see how 100% financing affects your cash flow.

Do one of these sources realize you want to give them a 2nd mtg position?

I think these calculators are good for what they do.  Your particular use case is a bit nonstandard.  Average them out maybe?  Without doing the calculations by hand, all you'll be able to get is a rough estimation.