How much money do you put down when using an HML

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How much money do you put down when using an HML

Sean Dezoysa
Investor · Toledo, OH · Member since 2012 · 292 posts · 34 votes
What I thought prior: "An HML will fund about 65% LT ARV + repairs" for a fix and flip

What I'm finding
- There are some HMLs that do the above ("100% financing" as they call it) but they tend to charge 3-4 points instead of ~2
- Most HMLs seem to have an additional criteria "Loan to Cost." So if the purchase price is 65k then you need to come up with maybe 10-15% yourself, plus closing costs, or have private money.

Are these the typical terms you guys are working with too?

Does anyone prefer the "100% financing" HMLs even if they tend to charge more points?
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Mark MunsonBusiness Member
Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
3y

Hi @Sean Dezoysa

Aside from some lenders that offer 100% financing (be very cautious of that) up to 70% of the ARV, you should expect anywhere between 85-90% of the purchase price + 100% of the rehab funds, so long as that collective amount doesn't exceed 75% of the ARV. You are going to be responsible for closing costs, financing costs, and the down payment. Feel free to message me if you want me to walk you through a scenario, I'd be happy to help.

[email protected]407-900-8799
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  • Mark MunsonBusiness Member
    Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
    3y

    Hi @Sean Dezoysa

    Aside from some lenders that offer 100% financing (be very cautious of that) up to 70% of the ARV, you should expect anywhere between 85-90% of the purchase price + 100% of the rehab funds, so long as that collective amount doesn't exceed 75% of the ARV. You are going to be responsible for closing costs, financing costs, and the down payment. Feel free to message me if you want me to walk you through a scenario, I'd be happy to help.

    [email protected]407-900-8799
    CapSource LLC4.947 Reviews
    WebsiteView Page
    1Reply
  • Richard Loniewski
    Real Estate Agent · NJ · Member since 2021 · 567 posts · 127 votes
    3y

    Point increase is not much, but to qualify for 100% financing you need great credit and extensive experience. Most of the time investors land in the 80-90% Loan to cost range

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    I like 100% financing on small deals. 

    0Reply
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