All Forum Posts by: Ramsey Persing

Thanks guys. This is exactly what I needed! 

Hi, 

I'm new BP and getting things together for my first BRRRR. One thing I'm a little confused on is how Private Lending works. I have a few people that have indicated an interest to help me with financing in this, but I know there are limits on cash gifts you can receive so someone can't just give me $50,000 to buy a house and I return it to them in a few months with interest. So how is this usually done?

Do both parties co-sign on the deal then refinance to only one name in a few months? Does just the investor sign for the house then I buy it back it back with a conventional loan later at 75% of the value? 

I'd love to know how this works and what others do before I sit down and have the second conversation with the potential investors to make a clear plan. 

- Ramsey

Hey everyone. I'm also new to BiggerPockets and parts of this calculator aren't making sense to me. I've figured out HOW the numbers are calculated, but some aren't making sense for why. I'll give my sample data if anyone that has a Pro account wants to plug it in and help. I’ll also give what is shown on the report and post my questions after.

Purchase Price: $79,000

Closing Costs: $3,540

Estimated Repairs: $23,500

ARV: $146,000

Annual Taxes: $1345

Rehab Time: 3 months

Refinance Time: 6 months

Acquisition Loan

Down Payment: $11,850

Points and Fees rolled into loan: 1,171.50

Total Loan amount: $68,321.50

Term: 30 Years

Rate: 3.70%

Interest Only: NO

Include PMI: YES

Monthly P&I: $314.47

Total Cash Needed at Purchase: $38,890

Refinance Loan

Loan Amount: $100,000

Fees paid out of pocket: $2,250

Term: 30 Years

Rate: 3.20%

Interest Only: NO

Include PMI: YES

Monthly P&I: $432.47

Total Cash Invested: $8,833.79

Rental Info

Income: $1290

Fixed Expenses:

PMI: $17

Garbage: $22

HOA: $40

Insurance: $85

Property Taxes: $112.08

Other Monthly Expenses: $67

OK!! So here are my issues.

1. PMI doesn't seem to be included in the holding costs even though I entered it. However I was only able to enter it on the fixed expenses part. The report shows $1921.67 for the Holding Costs which is exactly the (sum(fixedexpenses)-PMI)*RehabTime. (I hope my excel speak is clear!) It doesn't include PMI even though I selected that it should.

2. Total Cash Needed at Purchase. No! This number is correct for making the purchase, but it does not include upcoming holding costs! Why? It seems awfully big oversight to encourage people towards a deal without the money to handle the rehab phase. See my sample budget screenshot. If I assume I start with $38,890 as the report says I end up in trouble. 

3. Also regarding the Total Cash Invested. I understand this number is

Refinance Loan - Refi fees - Purchase loan balance - Rehab budget - Closing costs

However look again at my budget vs the Report screenshot. The Reports shows Total Invested as $8,833.79. Here's mine. Due to the numbers I chose they are close, but that won't be the case if you pick different numbers. 

Since the entire purpose of a BRRRR is to make it to the Refi and Repeat. Shouldn't we calculate the difference of money I started with compared to what I end up with in my bank account at the moment of the refinance. The Total Invested number does not include holding costs or income through the initial rental phase. If we're using the current balance of the Purchase Loan at the moment of refinance we should be using all the data before that right?

For anyone that made it to the end of this and offers a reply thank you so much!

Hi All, 

I'm new to the community and been looking into starting BRRRR investing. One thing I've heard multiple times from friends (one who is a contractor himself) is that material costs for rehab have increased dramatically the past year. For those of you with a lot of experience, are you seeing this with current projects? Has it increased your rehab costs by a certain percentage?

As excited as I am to get into the game, I can't help but feel like I missed it by a year and won't be able to find deals that will be worth it after rehab. So, I guess I could use some encouragement that it's still been possible or the honest truth, it's just not a good time for BRRRR right now.

Looks like I'm joining in at the right time and found the right thread. I'm 36, living in Morgantown, and brand new to the idea of real estate investing being a possibility for me. I'd love to meet others that have been in it for a while. Did anyone decide on a time for a meetup?