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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!
Medina, WA has 50 hard money lenders operating within the city. The median loan amount in this city is $320,000. Interest rates for private loans average around 10.3%. The typical length offered for notes is 19 months. The average loan includes a 1.8 percent origination fee. Lenders offer on average a 76% LTV on hard money loans in Medina.
Warren finds a condo in the Broadmoor subdivision of Medina, WA to renovate and resell. Since he doesn't have enough cash to buy the $320,000 project outright, he takes out a private money loan from Top Dog Investment Group. The borrower will need to contribute 40% of the purchase price in cash to closing based on a 60% loan-to-value set by the lender. This makes the loan principle from Top Dog Investment Group $192,000. The loan is interest only, with monthly payments, and is for 6 months at 10% interest with 4 origination points to be paid at the closing.
Warren will have to contribute $128,000 at closing (40% on the 60% loan-to-value), plus he will pay the $7,680 origination fee. After the deal closes, he will pay Top Dog Investment Group $1,600 in monthly interest payments, or 10% times $192,000 divided by 12 months in the year. At the end of the note, he sells the renovated house for $400,000. After deducting the $9,600 in interest expenses ($1,600 times 6 months), the $7,680 origination fee, the $192,000 principle amount on the note, and the $128,000 he contributed to closing, he will make a total profit of $62,720 ($400,000 price minus $337,280 in costs). This profit would then be reduced by any building costs paid out of pocket.
Mark takes a hard money loan from Allstar Finance Company so he can rehab a townhouse to re-sell in the Bryant subdivision of Medina, WA. The loan has the following terms:
a) A $150,000 purchase price, b) a 75% loan-to-value (LTV), c) a 12 month term, d) a 8% interest rate, and e) a 3% origination fee.
If Mark succeeds in his goal of a $187,500 sales price, the numbers of the deal would be as follows:
$187,500 sales price
- $112,500 note principle (75% LTV)
- $37,500 down payment (25% on 75% LTV)
- $3,375 origination points (3% of the $112,500 principle amount)
- $9,000 total interest paid (12 months x 8% interest)
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= $25,125 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!
Funding Fix & Flip, Ground-Up Construction, and DSCR loans in 35 States. We're the lender for real estate entrepreneurs looking for fast funding, fair pricing, and amazing service.
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