Flipping Houses

Hard Money Buying Worksheet

Expertise:
1 Article Written

I have the worksheet I use of a ‘quick and dirty’ hard money purchase analysis and I thought I’d share it with you…download here! First if you don’t know much about worksheets, don’t worry; you simply input a few numbers at the top, and the worksheet automatically calculates the fields without your assistance. You just get to read the output.

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Why I Use Hard Money: My Theory

Let me explain why I call this my “Hard Money Buying” worksheet. First, I hate putting my own money in purchases, since I’m already putting in my valuable time I feel adding my money to boot is too much to ask. With hard money or what some call private investor funds (rich guys that have more money than time) I seek to borrow not only the acquisition funds but the rehab funds and all the carrying costs including interest payments for 6 months. This is more than enough time to bring the property back to market either as a rental or a sale opportunity.

The Hard Money Worksheet

There’s a screen shot below…and then I’ll give a tour of what’s on it.

First, the gray fields are the only fields that you use to input data. Everything else is auto populated off of those data fields. The “yellow highlights” are there so your private lender gets an eye-full of the good news! As I get “more serious” about a property, I’d do more “complex” calculations, but this worksheet is the basis for my private lender to make his decision from…after all if they won’t lend, I’m not buying.

hard money excel worksheet

For example of how I use this worksheet, the screen shot shows my Acquisition Cost at 61.54% and 65.24% after 6 months…if my lenders cutoff is 65%…I’m asking for an exception to the rule. They may say “OK” or they may not. I may have to fax “this deal” to a number of private or hard money lenders to see which one accepts my exception.

Private funds in my experience want about a 12% nominal rate and worse case, 5 points…so the worksheet reflects this. The worksheet reflects the 6 months of turnaround time and tracks the carrying costs over that time. Private funds usually won't lend if they are letting you in with "none of your own money" at a LTV of greater than 65%. The worksheet gives me two looks at LTV…one before 6 months of holding costs…and one after. This gives me the options with my private money loan request.

Next you’ll see the output for when I sell, the worksheet spits out gross profits for sales prices of 80% of appraised value growing in 5% steps up to 100%. So I can see what my profit potential is if I “hold out” for a higher sales price…or cut the home for a quick sale.

Now depending on the deal, I want to see a monthly cash flow projection as well. So there are inputs for annual property tax and hazard insurance estimates, as well as a 10% estimate for “management expenses”. Feel free to add any addition expenses the cost of a property manager, advertising, vacancy, and collection losses, etc. over the 10% I impugned in the “Est. Insurance” field until you feel you’ve adequately represented the “outflow” and then estimate your potential rent keying that in in the appropriate field as well.

For debt service, it is assumed a 90% loan at 8% amortized over 30 years on the 100% Sales Price figure. If these terms are too generous for you, feel free to calculate the final cash flow by hand using your own figure for monthly debt service…if they feel right…you're in luck because the worksheet cranks out a lovely "Est. Cash Flow for you!

There are some fields that are nice to show private investors like “cost per square foot” and “rent per square foot”…but they are more for “them” than for you.

NOTE: This worksheet is equally useful for a “fix and flip” scenario using 100% hard money…or a monthly cash flow analysis to help you make long term hold decisions.

Have fun…and happy investing!

    Mary Ann Ead
    Replied almost 11 years ago
    Nifty! Got myself a copy, thanks.
    Joshua Dorkin
    Replied almost 11 years ago
    Its a great little spreadsheet . . . thanks to Rob for sharing!
    Jerice Bergstrom
    Replied almost 11 years ago
    Nice spreadsheet, thanks.
    Jerice Bergstrom
    Replied almost 11 years ago
    Nice spreadsheet, thanks.
    Rob K. Blake
    Replied almost 11 years ago
    Glad everyone likes it. I use it to decide if a “hard money” or private investor structure is possible. These deals are my version of “no money deals” I typically use for cash foreclosure buying, REO buying, or “Don’t Wanter” buying of all kinds. Rob K. Blake PS: I can’t stress enough how having a few private guys who “know” you…that can make common sense decisions quickly will improve your RE investing. Train them to make quick, preliminary decisions…just from this worksheet, knowing if you get the deal under contract…you’ll followup with a full due diligence package and financial.
    Jonathan Farber Rental Property Investor from Plainview, NY
    Replied 11 months ago
    Hi Rob I know it’s been a while but is there still a copy of this calculator handy? Thank you!
    Ralph Chiodo from Pottstown, Pennsylvania
    Replied over 2 years ago
    HI Rob This spreadsheet is extremely helpful – thank you My question: You are also talking about a Due Diligence package and financial – can you help guide me on this package. I have Private Lending support – Friends and Family (for the most part) some Hard Money may be in my picture too I need direction on the paperwork part… can you provide a sample or a person I can speak with .. am I putting the private lender in 1st position on the mortgage etc thanks
    Erin Elam from Little Elm, TX
    Replied about 1 year ago
    Hi Ralph, did Rob ever answer this for you?
    Rod
    Replied over 2 years ago
    Rob, I am a first-time flipper trying to acquire as much information as I can before diving in. Your articles are very helpful; is there a way to get a link to download your Hard Money Worksheet?
    Brampton real estate lawyer
    Replied almost 11 years ago
    Great spreadsheet! got a lot of ideas from this, should really help!
    outdoors videos
    Replied almost 11 years ago
    Interesting post. Thanks for the cool ideas. “Next you’ll see the output for when I sell, the worksheet spits out gross profits for sales prices of 80% of appraised value growing in 5% steps up to 100%. So I can see what my profit potential is if I “hold out” for a higher sales price…or cut the home for a quick sale.” I bet that is a tough call. Especially considering the housing market of today. I would probably be more inclined to actually sell right away. Thanks! outdoors videos’s last blog post: THE BEGINNERS GUIDE TO CAMPING
    Rob K. Blake
    Replied almost 11 years ago
    outdoors video, Yes it’s always nice to create a tool that is useful in all markets…but I agree with you…nowadays a quick sale is better.
    Frank D
    Replied over 10 years ago
    Yes I loved the loan worksheet graphic.
    Frank D
    Replied over 10 years ago
    Yes I loved the loan worksheet graphic.
    Carrie Dawson
    Replied almost 10 years ago
    Very nice spreadsheet. It helped me a lot.. THANKS
    Larry Olson
    Replied over 5 years ago
    nice… does this work sheet work as well on multi-family props? does it cover all the bases? and…do you have a more complete worksheet that you would suggest using once you are in due diligence?
    selwyn
    Replied over 5 years ago
    Rob, thanks for sharing. It is now 2014, not sure if much has changed, but I’ll give it a go. Selwyn
    Richard
    Replied over 5 years ago
    I hope I am not out of line here, but I noticed in the article that you included in there about points. Like you I rather not put out of pocket expenses if I don’t really have to. I am wondering if you can included in a field about the $500 appraisers cost. When I did this years ago we actually had No Doc Loans something I had to be creative with seeing the most I could get was 70% ARV (LTV), the investor I was buying from showed that he was carrying back a 2nd Mortgage when in reality the loan payed for everything, including the appraisers fee of $500 (nothing changed much since then fee’s wise, lol). I rather not pay anything out of pocket if I don’t have to, let the loan do it all (granted that means less cash coming to my pocket at closing, but hey that is why we figure budgets for the repairs lol).
    Paul Mezzetti Rental Property Investor from Wellington, FL
    Replied over 4 years ago
    I have a question on the down payment. The sheet has a purchase price in cell B6. Should this price be the actual price of the property or the loan amount you are looking to get?
    Tamara V. Investor from Bethesda, Maryland
    Replied almost 4 years ago
    I have a question about the appraised value on the spreadsheet. Do you mean after repair value or do you mean the value of the property before improvements?
    Rodney Hicks from Grants Pass, Oregon
    Replied over 3 years ago
    Thank you sir, for the great information.
    Martha J Escudero Acosta Real Estate Investor from Buda, Texas
    Replied about 3 years ago
    I just would like to know if a print out of a BPcalculator result will motivate hard lenders in the same way. The BP calculator results page appears with colorful graphics and a customized professional detail when you add your logo or your name to the result before sharing it, just wondering…
    Vijaianand Thirunageswaram Real Estate Broker from Sugar Land, TX
    Replied over 2 years ago
    I don’t see link to download the worksheet. Can I get the worksheet copy please?
    Vijaianand Thirunageswaram Real Estate Broker from Sugar Land, TX
    Replied over 2 years ago
    Sorry, I found. Missed it on the top.
    Jennifer Abbott Investor from Niagara Falls, New York
    Replied about 2 years ago
    Thanks for the useful information and tool ?
    Christi Hawkins from Columbus, Ohio
    Replied almost 2 years ago
    Great information, thank you for sharing it with us
    Timothy Huschart from Plainfield, Illinois
    Replied over 1 year ago
    Great article and will be using this spreadsheet. I agree on using hard money lenders …and always try to have options.