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The ORIGINAL LENDER of NOT requiring any of the below: NO Application, tax returns, credit check, appraisals, pre-inspection, prepay penalty, upfront fees, survey, bank statements or employment!
Kennedale, TX has 50 private money lenders issuing loans in the city. Loan amounts average approximately $291,250. The average interest rate for loans in Kennedale is 11.3%. The typical length offered for loans is 19 months. The average loan offered in this city carries a 3.4 point origination charge. Lenders typically offer a 70% loan to value on hard money loans in Kennedale.
Terrence is an investor in Kennedale, TX. He finds an run-down property in the Southwest area and decides to rehab it and sell it for a profit. The house has a cost of $210,000 but he does not have the full amount so he takes a hard money loan with Investors Funding. As the lender agrees to a 75% loan-to-value, Terrence will be required to put 25% down and the principle amount of the note will be $157,500. The parameters of the deal dictate a 9% note for 6 months. They also stipulate a 5 point origination fee, that will also be paid at closing.
In accordance with the terms of the deal, Terrence will need to pay a $7,875 origination fee plus 25% of the sales price, or $52,500, since there is a 75% LTV. After the deal closes, he will pay Investors Funding $1,181 in monthly interest payments, or 9% multiplied by $157,500 divided by 12 months in the year. At the end of the loan, he sells the rehabed house for $252,000. After subtracting the $7,088 in interest payments ($1,181 multiplied by 6 months), the $7,875 origination fee, the $157,500 principle on the loan, and the $52,500 he brought to the closing, he will earn a gross profit of $27,038 ($252,000 price minus $224,963 in costs). This profit would then be reduced by any renovation costs paid by the borrow.
Roger is a an investor in the Carver Heights area of Kennedale, TX. He purchases a run-down house for a remodeling project and takes a hard money loan from Success Investment Corporation with the following paramters:
$380,000 purchase price
50% loan to value (LTV)
18 month term
14% interest rate
4% origination fee
Roger intends to sell the house at the end of the term for $532,000. If he succeeds, the deal numbers would be the following:
$532,000 sales price
- $190,000 note principle (50% LTV)
- $190,000 down payment (50% on 50% LTV)
- $7,600 origination fee (4% of the $190,000 principle amount)
- $39,900 total interest paid (18 months x 14% interest)
-----------------------
= $104,500 total profit (doesn't include taxes or renovation costs)
The ORIGINAL LENDER of NOT requiring any of the below: NO Application, tax returns, credit check, appraisals, pre-inspection, prepay penalty, upfront fees, survey, bank statements or employment!
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