# [Calc Review] Help me analyze this deal - What Am I Doing Wrong??

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

Can you give some more information on what type of deal you are analyzing? It's difficult to tell what's right/wrong without knowing anything about what you are looking at.

It's a duplex. I want to offer \$145k. Asking price is \$185k. I have personal funds to cover a 5% down payment (\$7250) and up to \$3k in closing costs. I will seek a loan for the balance of the acquisition, repair and holding costs during the rehab period. Either I'm entering the data wrong or there is a shortfall in the calculators capability. Property can rent for \$2500 - 3000 after rehab and will have an ARV of about \$250,000. If I borrow 198,000 (Acquisition \$137,750 + Repair \$55,000 + Holding \$5,000) and property appraises for \$250,000 I would be right at the PMI avoidance threshold (80%) of LTV. The repairs and upgrades would ensure an upper level rent for the area (\$1300-1500). I look forward to your advice. Thanks

@Luis Bermudez First of all, what type loan do you think you’re getting for purchase and rehab (forget about holding costs) for 5% down on an investment property?

Your closing costs will be way more than \$3k.

You don't think I can use hard money or private lenders to acquire this property if I'm only using funds for 4-6 months?

A month to 6 weeks of taxes, insurance carryover, title search and an attorney: what other closing costs am I missing.

What factors other than LTV are considered when determining if a property qualifies for PMI?

I'm glad you're bringing all of this up.  I'm ready to learn.  Thanks

First of all, great job in taking the initiative to try to make a deal work. Looks like you're headed in the right direction. A couple of things to keep in mind as you look at trying to put together this deal. It's always a good idea to have a solid realtor to get good comps for current and future values. It will help in presenting accurate info to a lender and will only increase your credibility. Also, an experienced lender will be able to tell what type of loan products are available for which situations. Also, they can give you the rundown on how PMI is calculated.

Personally, I've never heard of a loan product that would pay for acquisition and rehab for only 5% down. From what I've seen, a lender will typically finance a property with a construction type loan for 20% down and cover 100% of rehab up to 80% of ARV. Your lender can get you pretty exact numbers on closing costs too. Although, if you've found one for 5% down then that's awesome!

If you are able to get the property \$145K you might consider house hacking by using an FHA 3.5% loan and living in one side. You might be able to get a HELOC or rehab loan and fix it up while living for free.

Keep us updated on your progress! Best of luck.

I have 5 comps. 3 are at or above the ARV value. 2 are below. I am working with a realtor. You've offered excellent advice. Thanks a bunch. But ultimately, the calculator still doesn't offer an option to show that I am borrowing the repair funds. Or, am I doing that wrong too?

@Luis Bermudez I see what you mean. I've not used the BRRRR calculator so I couldn't tell you for sure. Try running the report with the purchase price as the total acquisition loan amount. 145K + 55K = 200K. The report should show a total acquisition cost of 200K with 55K of that as repair costs. 200K will be what you refinance it for.

this is bad math and completely unrealistic . 3k closing is delusional and so is 5% down without a fha I’m not saying your deal

Sucks but your numbers are grossly optimistic . A hard money lender is going to require way more than what your banking on

Thanks @DennisM.  That's why I'm here.