5/20/12 BP Newsletter: Pacing Your Investments, Increasing Profits, & Speeding Up New Deal Screenings

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Calculating Profit on Rehab Transactions

Wednesday, March 28

We do a lot of hard money rehab lending here in California, and one thing that many clients have trouble with is calculating all the costs involved with their rehab project and figuring out what their profit potential is.


More seasoned investors have worked through enough transactions that they are able to calculate this, or they have created a spreadsheet to do it for them, but for the newer investors getting started, this can present more of a problem.  After all, knowing your profit potential going into a deal is extremely important.

We've put together a nifty little calculator that will help calculate profit potential.  It allows for all hard money loan costs, rehab costs, insurance, selling costs and hold time.  In addition, it will calculate profit potential for just a hard money loan, or for a hard money loan in conjunction with gap financing.

For investors using gap financing, it also allows you to input multiple return calculations.  This includes flat returns, annualized returns and participation returns.  You can calculate for one, two or all three of these in conjunction with each other, allowing you to see at a glance where your costs are, and again giving you a total profit potential.

You can go here to check out our rehab profit calculator.

For those who are looking for hard money to finance a project, we are able to help with a wide variety of loans here in California.  We do a lot of rehab loans, lending up to 65% of the after repair value.  In addition, the loans we place do not require appraisals.  Instead, the properties are comped, with our goal being to comp like properties. 

Many times appraisers will take into account other distressed property sales when doing an ARV type of appraisal.  This is legitimate as that is the market today, but for people fixing and flipping homes, that is not the target value.  Our valuation looks for private party to private party sales as opposed to distressed sales on which we can then base a true after repair value.

For more information, visit our hard money lenders page.  You can navigate using the left hand navigation to learn more about our different types of loans.

Tagged as: private, money, hard, rehab, loans


Hard Money Loans

Thursday, October 13

Hard money loans are my specialty.  I can help place loans secured by real property located in the state of California.  There are a number of basic programs we offer, and I will go over them in general here.

Rehab loans have been popular lately.  These loans are based on an after repair value, or ARV.  We have programs that will go up to 60-65% of the ARV.  These are short term loans, typically 12 months max, and are interest only with no prepayment penalty.  We impound money for interest payments, and also set up a fund control account for the borrower to draw on for the repairs needed.  You can find more detailed information about these programs on our rehab loans page. 

Construction completion loans are also a product we offer.  For properties that are partially completed, we can structure a hard money loan much the same way our rehab loans are structured, with perhaps a longer interest reserve period depnding on how long the project is going to take to get to completion.

Commercial hard money loans is another product we offer.  These are pretty straight forward, and offer a lot of flexibility.  We do not require a specific DCR to qualify, and can lend on fully leased, partially leased or vacant properties.  Typical loan to values that we offer can range from 50% up to 65% of current market value.  We typically offer terms of one to five years on these loans as well.

For residential lending, we only lend for non consumer purposes.  That means the funds must be used for business purposes.  We cannot finance a purchase of a primary residence, for example, but we can finance acquisition or refinance of investment property.  Loan to values range between 50% and 60% on our residential loans, with some exceptions to 65%.  One to five years for the length of term is typical.

Land loans are also something we can help with, although our loan to value ratio is very conservative.  The maximum loan to value on land we are able to help with these days is 30%.  If you are interested in a land loan, a phone call is highly advised as these loans are truly case by case.

For more information, please visit our hard money loans page online! 

Tagged as: Hard Money Loans, Hard Money, hard, money, private, loans, financing


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Chris Goulart

All California Lending
Hard Money Lender
Brentwood, California


Website: http://www.loansforcaliforniahomes.com
Phone: 877 462 3422

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