Can anyone share with me the numbers for the hard money lenders so i can get a better idea of how it works and things i can look for? Numbers like the downpayment, price of the house, closing/holding cost and monthly payments. Also did anyone do a deal with just the loan money? Thanks I'm trying to get started and would love a good idea of what I'm looking at when it comes to my personal money since I don't have a lot.
Numbers like the downpayment, price of the house, closing/holding cost and monthly payments. Also did anyone do a deal with just the loan money?
Generally speaking, you'll need to bring somewhere between 10-25% of the total project costs to the closing table.
Lenders can classify total project costs differently, but for many it simply means the purchase and rehab amounts.
An example of this would be as follows;
Purchase price: $100,000
Rehab amount: $50,000
Total project costs: $150,000
In our hypothetical scenario, you would need to bring somewhere between 10-25% of $150,000 to the closing table.
Generally speaking, your cash outlay doesn't end there. You will also need to float the first construction draw, or the first part of your renovation budget. Although many hard money lenders will finance 100% of rehab costs, they do so on a reimbursement basis.
Doing a deal with just loan money is extremely unlikely unless you find a unique private lender. As mentioned, most hard money lenders will require you to bring some portion of the total project costs to the acquisition and also float the first construction draw. Many hard money lenders also stipulate that they be the first and only lien on the subject property, so getting a 2nd can be difficult.
Hope this helps,