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There are 50 lenders operating in Marcellus, NY. The mean amount for loans in the city is $293,215. The mean interest rate for private loans in Marcellus is 11.3%. The mean term offered for loans is 17 months. A typical hard money loan made in the city carries a 4.2 percent origination charge. The average loan to value offered for loans in Marcellus is 74%.
Roy is an investor in Marcellus, NY. He discovers a run-down property for sale and wants to rehab it and re-sell it for a profit. The property costs $170,000 but he does not have the full amount so he takes out a hard money loan with West End Investment Group. The terms of the deal include a 65% loan-to-value (LTV), so he must bring 35% of the price as cash at closing, making the principle loan amount $110,500. The loan is interest-only, with monthly payments, and is for 18 months at 14% interest with 2 origination points paid at closing.
The borrower will have to contribute a total of $32,400 up front to pay the $59,500 down payment plus the $2,210 origination fee. Once the deal closes, he will have to pay the lender $1,289 in monthly interest fees, or 14% times $110,500 divided by 12 months in the year. Roy's intention is to finish the rehab within the 18 months and re-sell it for $238,000. If he succeeds he will make a gross profit of $42,585 ($238,000 sales price - $110,500 principle - $59,500 cash paid at closing - $2,210 origination points - $23,205 in total interest payments.
Scott is a real estate investor in Marcellus, NY. He finds a run-down house for a renovation project and takes a hard money loan from River City Finance Company with the following paramters:
$160,000 purchase price
85% loan-to-value (LTV)
6 month term
8% rate of interest
4% origination fee
Scott plans to list the project at the end of the term for $224,000. If he achieves this goal, the deal numbers would be as follows:
$224,000 sales price
- $136,000 principle (85% LTV)
- $24,000 cash paid at closing (15% on 85% LTV)
- $5,440 origination fee (4% of the $136,000 principle)
- $5,440 total interest paid (6 months x 8% interest)
-----------------------
= $53,120 total profit (doesn't 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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