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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.
Montezuma, KS has 50 lenders serving the city. The median loan amount in this city is $286,111. Rates for hard money loans average about 10.6%. The mean note issued in this city has a length of 37 months. The average origination fee for the loans is 3.1 percent. Lenders typically offer a 76% loan-to-value (LTV) on deals in Montezuma.
Dale is an investor in Montezuma, KS. He finds a run-down property and wants to renovate it and sell it for a profit. The house has a cost of $260,000 but he doesn't have the full amount so he takes a private money loan with Green Square Investment Company. The borrower will have to fund 35% of the purchase price in cash to the closing based on a 65% loan-to-value stipulated by the lender. This makes the principle amount from Green Square Investment Company $169,000. The interest rate on the loan is 11% for a term of 12 months and the company requires a one point origination fee at closing. The interest is to be paid monthly and the principle amount will be paid back after the sale of the property.
In addition to paying the $1,690 origination fee, Dale will also have to fund $91,000 of the purchase with his own money, or 35% of the purchase price. After the loan is closed and Dale takes over the property, he will have to begin making monthly payments of $1,549 to Green Square Investment Company ($169,000 principle x 11% / 12 months). At the expiration of the loan, he sells the rehabed house for $351,000. After subtracting the $18,590 in interest expenses ($1,549 multiplied times 12 months), the $1,690 origination fee, the $169,000 principle on the loan, and the $91,000 he brought to the closing, he will make a total profit of $70,720 ($351,000 price minus $280,280 in costs). This amount would then be reduced by any rehab costs paid by the borrow.
Pretty Perfect Funding Company issues a hard money loan to Edgar for a rehab project in Montezuma, KS. The deal includes the following:
a) A $390,000 purchase price, b) a 65% loan to value (LTV), c) a 12 month term, d) a 13% interest rate, and e) a 3% origination fee.
After the renovation project is finished, if Edgar sells the house for $507,000, the numbers would be as follows:
$507,000 sales price
- $253,500 principle (65% LTV)
- $136,500 down payment (35% on 65% LTV)
- $7,605 origination fee (3% of the $253,500 principle amount)
- $32,955 interest payments (12 months x 13% interest)
-----------------------
= $76,440 total profit (doesn't include taxes or renovation costs)
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.
Offering Fix and Flip, Bridge, and DSCR loans. With same day approvals, 3-5 day close time, and lending in 47 states, Park Place Finance will get your next deal funded fast!
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