All Forum Posts by: Terrance Harrington

@Ben Millar thanks for your input, I actually got that formula from one of the blog posts on BiggerPockets. I'm going to play around with your suggested formula. 

Thanks for responding @Brandon Turner! Yes, I understand how the flip side of the calculator is computing the results. However, when I try to do the numbers by hand for the rental side calculations, I don't seem to understand how it's being computed. So, can you tell me what formula is being used to compute the rental side calculation? 

@Brent Coombs thanks for your response. I did the math that way and I totally get it. However, my plan is to become a biggerpockets pro member and use the wholesale calculator and printed pdf when presenting the deal to investors. I followed a video presentation that @Brandon Turner did with the calculator and when I went to check the numbers by hand the MAO does not come out the same. My concern is that when pitching the deal to an investor I'm going to be asked how did I come up with the numbers and I won't be able to explain how the numbers are being calculated. Are you familiar with the formula that the wholesale calculator uses? Please see attached image. Thanks again for responding.

I'm trying to understand how the maximum purchase price is being calculated when using the wholesale calculator rental option. I've tried using this formula MAO = [ARV] – [Flipper’s Profit] – [Repair Costs] – [Fixed Costs] – [Wholesale Fee] that I found on a biggerpockets blog post, however the math just isn't adding up. It seems that the calculator is using a different formula? I would like to jumpstart my real estate investing career by becoming a wholesaler first. I would like to have the biggerpockets calculators in my arsenal of tools, however at the same time I would like to be able to explain the numbers intelligently. @Brandon Turner @Joshua Dorkin can either of you guys chime in to discuss what formula the calculator is using? Thanks in advance. 

As a newbie real estate investor I believe that the tools offered on BiggerPockets are Awesome. However, I'm very analytical and I like to understand how to perform the calculations by hand. I have been trying to figure out how the Wholesale Calculator is calculating the MAO. I've tried using the following formula: MAO = [ARV] – [Flipper’s Profit] – [Repair Costs] – [Fixed Costs] – [Wholesale Fee], however my calculations are much different than what the calculator calculates as the rental owners purchase price.

Here are the numbers that I'm using:

After Repair Value = $150,000

Desired Wholesale Profit = $5,000

Cash Buyer's Desired Cash on Cash Return = 12%

Loan Amount = $100,000

Loan Interest Rate = 5%

Amortized = 30 years

Purchase Closing Cost = $3,500

Total Gross Monthly Rent = $1,800

Other Monthly Income = $50

Property Taxes = $1,350

Monthly Insurance = $45

Vacancy Rate = 8%

Repairs = 8%

Cap Ex = 5%

Property Mgmt = 10%

So based on these numbers I'm calculating $150,000 - $18,000 (12% COC) - $25,000 - (not sure what's considered fixed cost) - $5,000 = $102,000 but the calculators states that my MAO is $124,767.84. 

Help, what am I doing wrong???

As a newbie real estate investor I believe that the tools offered on BiggerPockets are Awesome. However, I'm very analytical and I like to understand how to perform the calculations by hand. I have been trying to figure out how the Wholesale Calculator is calculating the MAO. I've tried using the following formula: MAO = [ARV] – [Flipper's Profit] – [Repair Costs] – [Fixed Costs] – [Wholesale Fee], however my calculations are much different than what the calculator calculates as the rental owners purchase price.

Here are the numbers that I'm using:

After Repair Value = $150,000

Desired Wholesale Profit = $5,000

Cash Buyer's Desired Cash on Cash Return = 12%

Loan Amount = $100,000

Loan Interest Rate = 5%

Amortized = 30 years

Purchase Closing Cost = $3,500

Total Gross Monthly Rent = $1,800

Other Monthly Income = $50

Property Taxes =  $1,350

Monthly Insurance = $45

Vacancy Rate = 8%

Repairs = 8%

Cap Ex = 5%

Property Mgmt = 10%

So based on these numbers I'm calculating $150,000 - $18,000 (12% COC) - $25,000 - (not sure what's considered fixed cost) - $5,000 = $102,000 but the calculators states that my MAO is $124,767.84.

Help, what am I doing wrong???

I just watched @Brandon Turner video on using the Biggerpockets Wholesaling calculator and have a question regarding how the Rental Owner's Purchase Price is being calculated? I tried adding the loan amount plus the purchase closing cost plus the estimated repairs but the math is not adding up. Can someone please chime in and tell me how this price is being calculated? I've added a screenshot for reference. Thanks.

@Anthony Kaleta I'm still learning the community etiquette, I didn't even think to vote. Thanks for the reminder.

@Mike Sedlacek thanks a million!!! Yes, this definitely made everything clearer. I appreciate you taking the time to respond! 

Hi, I’m a newbie who is thinking about upgrading to the pro membership in order to help with my real estate investing business. I’ve attended a few webinars and recently toyed around with the rental property analysis calculator. I’m trying to obtain a level of fluency to be able to interpret what I’m seeing, however I’m having a problem figuring out some of the formulas of the calculator and is wondering if someone could help decipher the formulas?

Monthly Cash Flow = Income – Expenses

Pro Froma Cap Rate = ?

Purchase Cap Rate = ?

Debt Coverage Ration =?

ARV based on Cap Rate =?

Income-Expense Ration (2% Rule) =?

Thanks in advance!