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Santa Teresa, NM has 50 private money lenders operating in the city. The average amount loaned in this city is $301,563. Interest rates on private loans made to Santa Teresa investors average 9.7%. 21 months is the average length for notes issued in the city. The average origination percentage added to the loans is 2.8%. Lenders offer on average a 73% loan-to-value (LTV) on loans in Santa Teresa.
Jami closes on a $240,000 rehab project in Santa Teresa, NM, using a private money loan from Evergreen Lending Corporation. The borrower will have to bring 20% of the sales price in cash to closing based on a 80% loan to value stipulated by the lender. This makes the principle note from Evergreen Lending Corporation $192,000. The rate on the loan is 13% for a length of 12 months and the lender requires a three point origination fee at the closing. The interest payments are to be paid monthly and the principle will be paid back after the sale of the property.
In addition to paying the $5,760 origination fee, Jami will also have to fund $48,000 of the purchase with her own funds, or 20% of the sales price. Once the deal is executed and Jami takes over the property, she will begin making monthly payments of $2,080 to the lender ($192,000 principle x 13% / 12 months). If Jami accomplishes her goal of a $300,000 total sales price when the loan expires, she would make a gross profit of $29,280 after repaying the principle and deducting the money she paid at closing, the origination points, and the total monthly interest payments.
Capable Finance Group issues a loan to Francine for a rehab project in Santa Teresa, NM. The loan includes the following:
$260,000 purchase price
55% loan-to-value (LTV)
18 month term
12% rate of interest
1% origination fee
Assuming a $377,000 sales price after the 18 month term, the numbers for this deal would look like this:
$377,000 sales price
- $143,000 loan principle (55% LTV)
- $117,000 cash paid at closing (45% on 55% LTV)
- $1,430 origination points (1% of the $143,000 principle amount)
- $25,740 interest payments (18 months x 12% interest)
-----------------------
= $89,830 total profit (doesn't include taxes or renovation costs)
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