Hard money loan example/explanation
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