How to Understand Infinite Return through an Example Deal

[@MrShaquira24]

I found Ken and Robert’s videos by mistake...... best mistake of my life. Valuable information.

[@oasysgroupofcompanies2056]

This video worth $5k worth of paid seminars...bless KZbin! Thanks for sharing a insider info from the inside Ken!

[@himanshukamble6025]

Hey Omar ru n Indian man!? Me too we really need to do this in our India! What do u say bro?? With our Financial Education!👍 Waiting for your reply.....

[@shyyam100]

Hey! I am from India. We need to do this in indian context. Why don't we talk and discuss what can be done?

[@harshal6342]

totally agree

[@devgupta2897]

@@himanshukamble6025 yes we can do it if we take action properly and share info...

[@61044711]

@@devgupta2897 can we do it really in indian market. For this we need to start company or individual can also do this.

[@IterumLife991]

Excellent video Ken. I've been investing in 1-4 units for about two years now - I have 10 units and a plan to get to 40 units in the next 3 years with no external funding. You're teaching me how to take it to the next level and build significant wealth with other investors. I want to do this after my 3-year plan is done. Thank for peeling back the onion.

[@juliosantos1628]

Hi Congrats for your business! Please help me figure out those scenarios: A) What happens and how do you manage if , from a moment to another, due a real state bubble or other, your property lose value and stands very below loan amount? B) what happens if from any weird situation you cant rent your property, but now you have a massive loan to pay? Thanks

[@paulpena9548]

Thank you. One of the best videos on YT describing why RE is the King of all investments!

[@KenMcElroy]

Thanks for watching Paul. I'm glad you found good value in the video!

[@regenerativeliberty7915]

I cannot believe I just sold a triplex; I should have refinanced. I was brought up rehabbing undervalued multifamily and mixed-use properties. We would hold then sell and find the next project. Not sure how my parents and now I have missed the last critical step of refinancing. Then I watched this video and the light bulb went off. Thank you so much for this video and laying out the plan in detail. Currently we are putting in an offer on a six plex that breaks down to 5700 gross, 2400 NOI, 80K down for 320K price. It is 1/2-acre lot and 7000 sqft, so large units. Anyhow thanks again for all the videos, but this one in particular is a game changer.

[@jpgechele]

The way explained it makes it so easy to understand! It’s like having a friend sharing his knowledge.

[@MONITRIQUI]

I feel like the luckiest person in the world after seeing the Spanish (not my first language because the first one is Trique) subtitles which gives me a better understanding of the topic you’re talking about. Thank you! I love you!

[@asonyutonny7635]

Have just sat in the lecture theatre of a real estate professor and he nailed infinite return for me 👌👌

[@SSB-gq5tu]

Hearing this in 22' and still motivated by it your the man Ken !!

[@joepschmobly]

Fantastic videos! Thank you for producing them. Will you please explain the details regarding the agreement with the investors? What percentage of ownership do they have upon initial investment? What percentage of the profits do they receive? How does this change after youths first cash refinance? Etc. Much appreciated.

[@wesleyteenwesley]

Thanks man, it hard to find people sharing so openly and clearly explaining the concepts straight forward.

[@Potatoroomr]

I came back to rewatch this Ken you’re going to make my family rich with this type of knowledge

[@Erandiski-cc4dt]

Currently doing this with our plaza refinanced. With the money of plaza we will buy a Bigger Shopping center. With zero of our money it's other people money. Thanks Roberto kiyosaki and Ken, with Ken advise will do it even more.✊✊ people out there if you want to Invest in Real Estate listen to Robert, Kim and Ken this are the real teachers we need.

[@nimakh1]

Ken, God bless you! I have taken your course and this video and many other videos from you .. I just want to say , I hope to God you never feel alone, unhappy or sick ... thank you

[@somebody602]

This is the best recap I've ever seen on KZbin. You're the goat

[@KenMcElroy]

Thanks Remi. I'm glad you are getting some value from the videos.

[@charlesritter6640]

@@KenMcElroy it's true Ken, when it comes to syndicating apartment complexes many of us consider you the GOAT! Keep up the great work 👍 we really appreciate it.

[@shanerockriver5030]

I just shared this video with my teenagers. They had many questions throughout which made it hard for them to stay focused and for me to stay coherent and they had a lot of trouble understanding how this was ever possible and at many moments seemed very dazed and confused with much head shaking. But once they began to understand the main ideas and grasped the concepts, they began giggling, jumping around, and laughing like they had just found a box of hidden candy that no one else knew about. Its gotten very chaotic over here !!!!!!!! Thank you for sharing this video !!!!

[@chuckiehsieh]

Shane Rockriver if you all understand please answer some of the questions in the comments, thanks.

[@raphnwokobia3301]

Brilliant lecture! Anyone who follows this intelligent investing method even a smaller scale will surely attain financial freedom from real estate.

[@junkercars]

thank you for taking time out of your day to enlighten us about how real investing works... im gonna halfta watch this a few more times ...infinite thanx

[@KenMcElroy]

Thanks for watching 1844junkercars! I'm glad you are finding it valuable.

[@Pete_L77]

Yeah this one hurts my brain. lol

[@TheTrancemix001]

This is great stuff. I always love seeing deals like this. But 2 challenges I see for a newer player. 1) without a track record, how do you get a loan from a bank for a multifamily? 2) without a track record, how do you raise equity investors? Success begets success but for people who are trying to become successful, i just don’t know how to get started without that track record of success. Of course, a newer person would go for something 1/10 this deal, but the questions still remain.

[@bigmoneymandan360]

I was looking all over and getting these guys who were unprofessional trying act like your friend on youtube and just seemed like they actually make money show there cars off and you realize they have cars not because they know how to sell but instead because they scam people. All talked about it but they were just talking points. You broke it down mathematically which is what I want not vague do's and donts. props bud you got a new subscriber. I am maybe getting into it soon but unsure where to start and you just broke it down like kindergarten math. later Ken and I'll lyk if I need any advice ;-P

[@InvestorMelDaveDupuis]

Love putting none of my own money in all of our deals. It’s been life changing.

[@warringalice3980]

LoVE it.....We did something similar with a single res about a year ago, much smaller scale. We went crazy and bought a 12 unit appt building about 18 months ago. we hope we can be good students and repeat your process. albeit at a much smaller scale.

[@tommieruiz2676]

By far, for me, the best most educational informative video for real estate investing. Although, there are some questions but overall extremely helpful. Thx 🙏🏼

[@deto2conduny]

Wow, this is so amazing! I have a long way to go, don’t even have my first rental property, but I’m amazed buy all this information, I find it so interesting and fun, I’m so encouraged to keep learning and start getting out of the rate race. Thank you for all the valuable information you share!!

[@rksr8103]

Ken all your videos are really really amazing. The insight details that you provide are real real great. Keep up the great work. Keep posting such informative example videos. Cheers.

[@jadezhs]

This opens my mind. I watched it many times and understand it eventually how the magic happened. Very useful content! This makes me decide to refinance my rental and do it the right way. I did my other refinances completely the wrong way. Thanks for the content!

[@mkelly1118]

Great video! 👏🏻Love the timeframe (‘05 -> ‘09) and cap rates (3.68 -> 4 cap) in the example here 💪🏻 A true value-add. Thank you!

[@MartinMartinez-uq4gx]

Can’t believe this information is free. Thank you so much Ken!!!

[@efrainrosario779]

Hi Ken, thanks for this TREASURE! Please excuse my ignorance all of you but...I am learning and even though I understood everything else, there is two things I don't understand, and they are these: How much of the 300K cash flow during the first 4 years, are the investors getting? And, Why do I keep paying the investors after the first 4 years, when I payed off the 4M to them? Who are the "investors" after the first 4 years, you and your partner? If that is the case, I understood everything loud and clear. Thanks for your response Ken or your team, or anyone that knows more about this than I do.

[@empoweracademy1322]

Superb example. Explained the magic so lucidly. Great Job!

[@mildredmccloud454]

El you know

[@toramatsuoka5408]

Ken, I love your stuff, been watching for a while; I’m actually in the middle of my first $10m deal, leveraging many of the things I’ve learned from your videos. My question here today is about cap rates. Your comment about that here was a bit confusing, could you do a video on cap rates?? Thank you for all your guidance!

[@ecstasybeats8687]

Well, the real estate business in my country's capital yield 30-40 percent profit yearly, but lucky you! If i had even 10 percent of a million, i would be a millionare in 5-6 years.

[@hollywoodbest9499]

@@ecstasybeats8687 really? Where are you from Sir?

[@DuduTNiyukuri]

Wooow, Eye-opening! 'Ve always wondered ... I was blind now I see! Thank you, Boss!

[@nhalie0517]

Been looking for this kind of video and finally found your content, thank you so much Ken for a very clear explanation.

[@kaloianmarinov7581]

You are a real teacher, none of this entrepreneur lifestyle bullshits.

[@KenMcElroy]

Thanks for watching Kaloian! I'm glad you are finding value in the videos.

[@kaloianmarinov7581]

​@@KenMcElroy So actually a cashflow of 2% of the value of the property per year is a good investment?

[@slatersconstruction414]

How and why do investors get paid after their initial investment is paid back? How does that work? You're awesome btw Ken! Best on KZbin

[@joelrocks888]

Thank you Ken. You are a blessing to others. Never tire.

[@acctsupsvc6454]

Thanks Ken...here from Jamaica and I just started watching your videos since yesterday... everything is new to me but I want to learn...

[@chinoc7046]

Thank you Ken, you're awesome! I love ABCs of real estate investing😁😁😁😁

[@UltimateBargains]

This video is an excellent summary of the basic syndication principles that I teach to accredited investors. I got my start on learning syndication and refinancing from two authors: Tyler G. Hicks and Robert Kiyosaki. "Mortgaging Out" through refinancing is an essential part of creating inter-generational wealth with real estate.

[@JA-vv8wy]

UltimateBargains do you mind if I ask which books by Hicks you learned about syndication from? I see he has several books & just wondering where to start. Thanks

[@keepgoing7630]

What is the name of book of Tyler G. Hicks?

[@TheThegreenpi]

So how does he get paid if the investors initially have all the equity and he's giving them all the cash flow? Does he charge a management fee or does he wait until the refi gives him $1M to give back to himself?

[@user-vu8vl9uq2m]

Thank you Ken for sharing some inside!! Appreciate your support!

[@Rob_0-4]

When you were talking about depreciation recaption, which I havtb heard before, I had a good idea what it meant and talked about quick capital gain vs long term passive income, I wrote this fat paragraph about why what it is and this guy literally confirms it don't sell for capital, hold on on, no tax, passive money for longer time, bank happy and you, I'm 17, didn't go to special class or anything I'm glad supervised I understood it, said things before he said them himself, I'm just poor 😂😭

[@Onecamera]

Excellent example. I hope I come across a deal like this at least once in my lifetime.

[@dianemai7439]

Excellent real example. It’s a great way to generate cash flow. Thank you.

[@KenMcElroy]

Glad it was helpful Diane!

[@desertforest2221]

7:06 Ohhhh the Loss! I see, I see. This is starting to makes sense, now.

[@sunnygupta970]

This information is gold .. thanks Ken

[@KenMcElroy]

Thanks for watching Sunny. I'm glad you are finding value in the videos.

[@remigiusttumaini1590]

Thanks so much Ken this is very practical I have learned a lot.

[@KenMcElroy]

Thanks Remigius! Glad you got value out of the video.

[@Just_trying_stuff]

@@KenMcElroy Hi Ken great video. One thing to understand? In your video NOI is whithout the loan payment. Should the NOI be profit after expenses including the loan payment?? Greetings from Serbia from growing Entrepreneur

[@keirdoubas]

Brilliant video. My investment methodology is exactly the same for 1 apartment as your 267. thanks for the video Ken.

[@paulosergiomoreirainocente7524]

Our each time I realize that the biggest barrier for the vast majority of people is without a doubt. The social along with educating real things, which are important. How do you teach ken mcelroy. Thank you very much. BRAZIL

[@savann.sun1980]

I just learn something big. That’s what I was looking for too. Thank you so much for sharing.

[@tocale]

Amazing explanation. Top 3 of the best videos i have ever watched. António from Portugal

[@TheGabeazrepresent]

Masterclass. Please keep producing and sharing these videos Ken. Subscribed.

[@johnnyb33good21]

Just beautiful! Seeing these numbers motivates me. I would love if you would make more videos on syndication that go deeper

[@Ed-em6mf]

4:36 - Loan payment 400k/month?? Maybe you meant per year? 'Cause 700k per year (NOI) with 400k per month (payment) - cashflow would be negative 4.1 million...

[@lang-ed3bk]

i'm confused. the noi was 700k annually, but the loan payments was $400k/mth. how are they able to make the monthly payments?

[@MikeInteligenciaFinanciera]

This was a masterclass 👏. Thanks for sharing this Ken. Great job!

[@excelpinoy1086]

Though technical but very logical presentation. It takes years to get that wisdom.

[@giorgosgovatsos8582]

Hi from Greece perfect example nice lesson to my mind hope to be successful in some years .! Thanks to you and Robert ..!

[@shallynovisyar899]

Thanks Ken. Great content. Another great finding in this video is also, I found you renegociate the Bank interest of the debt every time you refinancing the asset/debt, if i'm not mistaken.

[@2027759]

Great video Ken, simple, clear and inclusive. Thanks for educating us.

[@devanandauchoi5859]

Thank you Ken for the elaborate explanation of infinite return. This is one of the best ever video on KZbin. Now, My question is how do we manage payment to bank when we take loan for construction of building rather than buying existing building. In this scenario cash flow would be zero during initial construction days. Kindly enlighten me.

[@RealEstateRadioTV-SA]

Best Video By far on youtube world Thank you , Ken Mcelroy. Regards South Africa

[@parabellumboxing-akmalgert1821]

This is really soooo good! Thanks Ken, You are such a great mentor. 👍🏻

[@eddieatum617]

I liked the understanding of depreciation .. gold nuggets of info..big thank you...

[@kunalpatil4885]

Hi! Ken if the NOI is annual and the payment is monthly where is cash flow

[@emanuelbalbin5836]

I got the same question here 🤔

[@heightz64]

Depreciation. You use your “liability” as an asset.

[@snsxstealth4370]

Subtract the payment from the NOI which is what leaves you with your cash flow

[@joce5057]

@@heightz64 how do we do that if there’s no liability mentioned?

[@bautistaetcheves6538]

The payment it's also anual

[@garystalick2617]

Ken...You're fantastic. You made seem so simple and fun. Thanks for the video.

[@TMP10]

I am on my second property and looking to get a third. One thing I did not understand from this is how you (Ken) benefit from this deal (other than "owning" the property). The way I understand it is that all the cashflows go to the investors. So what is your cut in this?

[@derekstalhut2193]

Thank You Ken! You are truly a LEGEND !

[@Rob_0-4]

This guy is heaven sent

[@kirkmerrill992]

Great video wealth of information Ken! 👍

[@KenMcElroy]

Hi Kirk! I'm glad you liked the video. It takes a little while to get through it, but I think it will be very helpful to people.

[@kirkmerrill992]

I study everything you put out Ken. Those who put in the time will get the lesson your trying to teach.

[@mr.searightii5155]

Best video ever!!! So informative. Thank you.

[@WeiPhung]

Great stuff Ken! Super practical while educational. Will implement your tactics for a smaller project.

[@KenMcElroy]

Thanks for watching Wei! Glad you found the video helpful.

[@SmartLifestyle1]

Best ever information on rental real estate.Thanks a lot But one thing I want to know that which bank will loan you money with only 2.6% annual interest rates. Loan amount $15 M Bank payment $400k %=400k/15M×100=2.67%

[@kathydemetillo300]

It was 2005 so I think those days the interest rates are something like 2.6. Right now in Canada the interests rate are not very high too

[@洛杉矶的凯文同学]

@@kathydemetillo300 There's no way a commercial deal like this size back in the bubble time 2005 has this kinda interest rate, as Ken mentioned in the video it was around 6%, and if that's the case with a principal of $15M you're looking at around 80k/month = $960,000/year on loan payment, I had the same question as City Dental, how can the loan payment be this LOW???

[@nizarkadri3109]

Awesome video but I got one doubt! How can you borrow loan on same property without completing the previous loan? I am new to real estate so please explain in simple words or suggest me a video

[@tomaskucera3883]

So am I understanding right that if I have a loan for house for rent for example $250k - I have to pay tax up to the amount of interest? I live in Czech Republic and we don't have to pay tax only up to the amount of interest $7k and only for your own living home. Thank you for the explanation.

[@harrylove]

Ken - great info, and you’re easy to listen to also. Thanks for putting this out for everyone to see. I do this same thing, but on a micro level compared to you. My only regret is not doing it sooner! Thanks

[@teoweihan]

Hey there at @9:37... Does the interest from the 4M of cash out refi returned to investors a tax deductible expense?

[@CD-ii8it]

Absolutely genus, thank you so much for these videos. Life changing!

[@belisimatony3229]

Thank you for your teaching , I wish you can do with small investments like single housing like $200.000

[@levimalone4433]

You can. Cash out refinance can be used on anything as long as the numbers work.

[@collectableinvestor]

Ken, your $15M loan is only coming out to a 2.5% interest. At the time I think rates were at around 6%, that would give you a payment of over $1M a year. This would give a negative cash flow. Please advise. Thanks

[@1800options]

Sam Zirkiev what formula did you use to come that conclusion?

[@mkelly1118]

Paul Kumar , probably -> 400K (PMI) / 15M (loan) * 100 (percent) = 2.67% 15M (loan) * .06 (fed funds rate) = 900K + [lender arbitrage] = $1M+ Agree?

[@borisstantchev8924]

M K most of the time you get a interest only for 5yrs on multi family loans. That’s why I think these guys refi about every 5yrs.

[@danielwells774]

I came to the same conclusion. He is never going to answer this.

[@periperihustle4561]

good point, so it looks like this real life example is actually theory and bad theory at that

[@toddmullins7300]

I was with you for awhile then I was completely lost. Looks like I got some studying to do.

[@FabianBaez]

Phenomenal lesson Ken

[@KenMcElroy]

Thanks for watching Fabian!

[@humblebee7979]

Beautifully explained. Thank you.

[@invizibl]

great video. long time follower. been wanting to ask... what happens at 24 years when you can no longer depreciate? just pay taxes and call it good? ever a good time to sell? bought your book, so maybe the answer is in there.

[@lenamosakajp]

Super great video, it open my eye to learn how the professional investor do, thank you very much Ken!

[@thunderkey1]

Very good Case Study! really helpful in presenting the gist! thank you.

[@consistencyissucces9975]

Okay great video ken very informative! quick question . When you refinance the property after adding value to it and pay back the investors their money plus a return. Is the deal now fully yours and the investors go away looking for another place to invest there money or do they still own a percentage since they put the equity up.

[@harkenm]

Investors would always have the option to sell their ownership, but I doubt they would in this case. So they would still own a percentage. Not sure how their ownership percentages would shift with the influx of additional equity. That is most likely private information.

[@harkenm]

Actually, I think the additional money would just increase the value of each owner's equity share, and would not affect percent of ownership.

[@Jesse_Lane]

Absolutely fantastic, Ken!!

[@AlexAll-In]

Please Ken, this video is gold but most viewers like me don’t understand how you get to those numbers. Could you please, please say how the initial loan structure was? 19m = loan 6%= interest rate Years= ? Because I simple don’t understand how you get to an annual payment of 400k including principal and interest. If you had a loan for 30 years, you would be paying around 1m per year. Or did you do a loan where you only pay the interest? Please be so kind and answer this question or refer to a video where you go into the loan structure you are looking for with the bank! That would be absolutely awesome. Thanks!!!

[@ibookje]

A question: if you paid back the initial investors (4M), why are you giving them more (first 5M and later 10M)? Why not keep the increased equity in your pocket? Th investors got interest and their investment back right?

[@Chessspecialist]

Thank you sir, your lessons are helping me become a better investor

[@slee6593]

Cherish this video OMG - BEST on Web!

[@adipratapsinghaps]

2 questions: 1. In 2005, when you gave 300k to investors annually, where did you get the money to repair the apartments and add washers and dryers? Is it the 300k that you used instead of giving it to the investors? 2. All cash flow is going in the pockets of investors. What is going in your personal pocket?

[@hans-denisjr8417]

I’ve also been wondering. Maybe the equity, $5M in 2009 and then $10M in 2014. But how does he actually enjoys it?

[@jhblake123]

The cost to repair the apartments is probably around 100k or so. it's pocket change when you invest 4 Million so I am guessing he just rounded to make the math easier. For the second point, this guy was one of the investors. So part of that 4M came from his pocket, meaning he was getting part of the cash flow. This is why Trump only pays $750 in taxes while a minimum wage employee making 30k annually pays 10k in taxes.

[@jessegonzalez9091]

1). Depends on the cost of the repairs or improvements. If it’s true repair and maintenance, it is captured in the “expenses” in the NOI calculation. If there are additional investments into the property like washers/dryers, they are likely capitalized and put on the balance sheet as a depreciable asset. The depreciation would be captured in his NOI calculation as well. 2) He is likely invested alongside his external investors, so when he returns money to the investors, he gets his share as well. Often times the syndicator gets equity in the deal without actually contributing money/cash. They “earn” their equity from arranging the transaction. So for Ken or any other “arranger” they get infinite returns on day 1 (outside of sweat equity).

[@gowithten]

How to understand infinite return through a Deal A. Property Value B. Loan (LTV) C. Equity (OPM) D. NOI (Positive) E. Payment To Bank F. Cashflow G. Debt H. Depreciation

[@ReynaDPerez]

At 13:09 I got lost… wouldn’t the 400k pmt over the 4 years pay off the 15mil and 4mil ? Why would he use the 20 mil to pay off loan and equity?

[@jt5747]

Ken, could you explain the loan payment amounts on the various loans you took out on this property? You mentioned 6% on the 15M loan, and a payment of only $400,000. Wouldn't that be a $900,000 payment? I'm not sure how commercial financing works, so I'm a bit confused. Thanks for all the great videos!

[@洛杉矶的凯文同学]

same question here, not possible to get this low on the payments with those principal balances on commercial loans....

[@levimalone4433]

He is easily able to reach that kind of payment on this property at that interest rate. Why do you not think so?

[@EuropeanOnion]

I think he said 400K a month

[@rsoverdead9956]

Learn about how to calculate a mortgage payment (you should use excel or special calculators) its not 15M x 6%, his number shows that he took that loan for almost 3.5 years only. The mortgage payment includes Interest payment and principal payment; the interest for the first month is 15Mx 6% /12 = 75000/month and so the principal payment is 400K-75K = 330K.

[@JatinderSingh-cy2nz]

@@rsoverdead9956 So how does that cashflow? 700k annual NOI ~ 58k a MONTH - 400K = negative cashflow

[@kss0758]

Ken, there are a couple questions I have. 1. There are no listed expenses (maintenance costs, employee costs, insurance, property taxes, reno costs, etc) 2. Looking at an amort calc, the annual mort costs on the original $15m @6% for 30 yrs loan is $89,932.58 mo. or $1.079,000 yr. which would result in a $300k negative cash flow 3. The second mort of $20m @ 4% for 30 yr was $95,483.06 mo. or $1,146,000 yr. which would result in a $100k negative cash flow 4. Third loan of $25m @ 4% for 30 yr would be about $120K mo. or $1,432,246 yr and you are just now almost breaking even at this point. Based on all this data and the fact that you did not include any expenses, I am having trouble reconciling this as a cash flow positive business for you. Would you be able to help explain?

[@calstatesmogs7628]

All of what you said and not to mention the property in 2009 he claims was valued at 4% CAP rate…. Sorry, not believing this at all.

[@calstatesmogs7628]

And the property was “tired”. He did renovations to increase rent. Where did this money come from?

[@TokyoTaisu]

Scott, late reply but: 1. NOI is Net Operating Income after expenses. So costs are already deducted for sake of ease. 2, 3, 4. You amortize it at 30 years straight. But with commercial real estate you can opt for 1% amortization a year for example. Essentially dragging out repayment to 100 years. So after 30 years you still have say roughly 40-60% debt left of the original loan. Taking 1% amortization at 15M that's 150k a year. So total PMT loan payment he said is 400k. Then 400-150k = 250k interest part.

[@mams471]

Thank you Ken McElroy for this video it's very helpful and interesting

[@Planetgreenzen]

This is an extremely Great Value based video thank you for putting this together I loved it

[@KenMcElroy]

Thanks Planetgreenzen. Good to see you watching the videos.

[@eugenberzani1216]

Wow! Thank you so much Ken!

[@KenMcElroy]

You're welcome Eugen! Thanks for watching.

[@virajdance]

Burning question: how are the investors paying for the significant upgrades that allow for increased rents/NOI? Cash reserves or loan? If loan then is that based on other collateral in their portfolios? Tx. Great vids, btw.

[@swatisquantum]

virajdance when you raise money for the equity downpayment you also raise the $ amount for repairs. If it's value added real estate - After you refinance you will get the repairs and your down payment back.