[Calc Review] Help me analyze this deal

2 Replies

I'm pretty sure I filled this out correctly. I included points and private money fees, then for refinance I estimated my closing costs based on the loan amount.

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Guillermo - I think the mechanics of this analysis look good. I would suggest you add some expense "post-refinance" for reserves/ and/or maintenance. Maybe $100-$150 per month as a good starting point - If you do that you'll increase expenses a bit in the long term. It looks like you're thinking about a 70% LTV on the cash out refinance (270,000 x .7 = $189,000). That would leave you with coming up for the money (~$50,000) to pay back the hard money lender ($243k-189k). Personally, I'd like to get more of my money back in a BRRRR, so I would suggest searching for a lender willing to give 75% or even 80% LTV on a cash out refinance and then running your longer term analysis on a higher LTV amount. I think it would be worth it - so I would call 15-20 different local/regional banks and credit unions and see if they can give you 75%-80% LTV. I would also make sure you have some reserves in case the capital costs of the renovation wind up being higher than you expect. Good Luck!

Originally posted by @Greg Kasmer :

Guillermo - I think the mechanics of this analysis look good. I would suggest you add some expense "post-refinance" for reserves/ and/or maintenance. Maybe $100-$150 per month as a good starting point - If you do that you'll increase expenses a bit in the long term. It looks like you're thinking about a 70% LTV on the cash out refinance (270,000 x .7 = $189,000). That would leave you with coming up for the money (~$50,000) to pay back the hard money lender ($243k-189k). Personally, I'd like to get more of my money back in a BRRRR, so I would suggest searching for a lender willing to give 75% or even 80% LTV on a cash out refinance and then running your longer term analysis on a higher LTV amount. I think it would be worth it - so I would call 15-20 different local/regional banks and credit unions and see if they can give you 75%-80% LTV. I would also make sure you have some reserves in case the capital costs of the renovation wind up being higher than you expect. Good Luck!

Yeah thanks for you input. Sorry for late post. I dont get on here as much as I should. Yes I was doing 70% because my conventional lender does 70% LTV for 2-4 units and 75% on single family. I'll been calculating now better by making sure if I go with 70 or 75% I'll be able to payoff the private money lender and not have to come out of pocket.