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Nation’s fastest and easiest private real estate lender - Funding Fix and Flip, Ground-Up Construction, and DSCR. Closing as fast as 5 business days!
Kailua Kona, HI has 50 hard money lenders operating in the city. The mean loan issued is approximately $289,286. Rates for private loans average 10.4%. 43 months is the mean length for loans made in this city. The mean loan includes a 3.0 percent origination fee. The average LTV for loans in Kailua Kona is 78%.
Bradley finds a townhome in the Kalaoa subdivision of Kailua Kona, HI to renovate and resell. Since he doesn't have enough cash to acquire the $230,000 property outright, he decides to take out a hard money loan from Hometown Lending Company. Since the lender sets a 80% loan-to-value, Bradley will have to put 20% down and the total amount of the loan will be $184,000. The parameters of the note also stipulate a four percent origination fee that will be paid at closing and a 12 month, interest only note with a 14% rate of interest.
Bradley will need to bring $46,000 at closing (20% on the 80% loan to value), plus he will pay the $7,360 origination fee. The lender will collect $2,147 in monthly interest payments from the Bradley. This is calculated by taking the full loan value of $184,000, multiplying by the 14% rate of interest, and then dividing that amount by 12. If Bradley sells the project for $322,000 after 12 months, he would make a total profit of $58,880 after deducting the principle amount of $184,000, the money contributed at closing of $46,000, the origination points of $7,360, and the aggregate interest payments of $25,760. This amount doesn't account for rehab costs.
Kristy is a real estate investor in the Kalaoa neighborhood of Kailua Kona, HI. She finds an older house for a renovation project and takes a private money loan from East Side Finance Group with the following terms:
a) A $340,000 sales price, b) a 85% loan-to-value (LTV), c) a 6 month term, d) a 9% interest rate, and e) a 3% origination fee.
Assuming a $493,000 sales price at the end of the 6 month term, the numbers for the project would look like the following:
$493,000 sales price
- $289,000 loan principle (85% LTV)
- $51,000 down payment (15% on 85% LTV)
- $8,670 origination points (3% of the $289,000 principle amount)
- $13,005 total interest paid (6 months x 9% interest)
-----------------------
= $131,325 total profit (does not include taxes or renovation costs)
Nation’s fastest and easiest private real estate lender - Funding Fix and Flip, Ground-Up Construction, and DSCR. Closing as fast as 5 business days!
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