Financial Calculator? Skills?

I am getting ready to start meeting with sellers and I was wondering if others are armed with a financial calculator of some sorts. I’ve read good things about the HP 12C and the BII Plus I think.

Is this important to have?

What are the typical calculations I should be able to do easily on one of them?



Unless you can do loan payment and present value calculations in your head get a good financial calculator and learn how to use it. The HP12C is an excellent choice, I’ve used one for many years. You must learn to use the present value and payment calculator functions in order to compare loan options and sale price/terms. The cash flow functions can also come in handy for analyzing deals.

I’m a big believer that if you need a calculator to analyze the deal, it’s too tight.

When talking with the seller, you’re concerned with only one thing: how much to offer.

If you’re of the “75% of ARV” school of thought, then all you need is what you think the ARV is, times 75%, less the repair costs.

That’s it. You could subtract a few grand to leave you some negotiating room, but that’s a personal choice. I like to put my best deal on the table at the onset, but that’s how I run my business. YMMV.

I know lots of people that swear by the HP 12C, but it’s a Reverse Polish Notation calculator (the operators follow their operands; for instance, to add three and four one would write “3 4 +” rather than “3 + 4”). If you’re not used to this, then I would just go with the BII Plus.

Although, to be honest, I think any run of the mill calculator should be fine as well. You will be able to figure out debt service payments with the above calculators, but you can also get that same information from basic mortgage calculators on the Internet. Once you know what your cost of funds per $1,000 is, you can calculate your holding costs offline with a regular calculator.

Thanks for the advice guys. I appreciate it.

I’m a techie so I most likely will be bringing my PDA phone and laptop with me. Do you know any good caculator programs for the Windows environment? That way no internet access is needed.

I’m not used to the Reverse Polish Notation, so I might go with the BII Plus instead.

IMHO, you’re going to scare a few sellers. Bring a yellow pad and a pencil. Maybe a camera if things are going well, but that’s it.

And contrary to what Ron LeGrand says, leave the Mercedes at home.

I’m a huge believer that while you’re a buyer of a house, you’re really a seller first and foremost. You need to sell people on the idea of selling you their house. That means building rapport and bonding and listening to their stories, etc. I think showing off too much technology will create a gap that will be difficult to fill.

If you’re dealing with sellers, why would you need a mortgage calc anyway?

As stated, what you need to know (and not from the sellers), is the basic value of the house in fixed up shape, what the repairs will cost, and what you can pay for it in order to make money.

Again, as stated, there are common rules, such as 70% of values minus repairs that you can follow and that’s simple. No need for calcs, pdas, or laptops.

And if you still want a mortgage list, get a card.