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Casey Jones
  • Investor
  • Humble, TX
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Hard money loan example/explanation

Casey Jones
  • Investor
  • Humble, TX
Posted Dec 24 2014, 15:32

Hello all, 

First time posting here. Long time podcast listener. Would someone please explain the below scenario to me? I understand hard money when the ARV is much higher than the purchase price, but what about when it's not?

Purchase price: $60,000

Repairs: $15,000

Appraisal before repairs: $75,000

Hard money loan: $75,000

Down payment: $25,000

Estimated ARV: $75,000

When the repairs are done and it's time to lease the house, how will the financing look when refinancing to traditional financing? Will any cash above 75% financing be given back to the borrower?  Thanks for your time. I hope I've communicated clearly. 

-Casey

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