Assistance with Hard Money expense calculation

[Whitney Breedlove]

Super basic question alert! 

I have trouble factoring in exactly how much my hard money expenses on a given project will be. I am looking to use hard money to purchase a home with cash, perform light rehab, and then refinance to exit out of the hard money loan. For example, can someone analyze the hypothetical below to let me know how much I can expect to pay my hard money lender:

Purchase Price: $100k

ARV: $150k

Rehab: $20k

Rents: $1500/mo

Hard Money Terms:

Up to 70% of the ARV

3 points origination 

$750 processing fee

$500 appraisal/application fee

$25 flood cert

13% interest only payments.

6 mo term

Some additional questions I have include: What if the rehab/rent/refinancing process takes longer than the 6 month loan term? What additional expenses should I expect at this point? I'm assuming  any rehab and refinance will take longer than the 6 mo loan term allotted by the hard money lenders because there is typically a seasoning period of at least 6 mo. 

[Michele B.]

First off the 70 LTV means the loan would not cover the buying cost and the rehab. It would be $105,000. YOu would need to put in the rest plus all the costs you are looking at.....4,425.00 for those so all out of pocket you will need 19,425.00 and that is only for the start plus then it is 13% for each month.....3,150 times 6 months so now you are into this property total if you get it done in the 6 months for ....124,425.00 and if it goes over one month then you would have to pay a payment on the loan plus the 13% and if you go over 15k in rehab you are making zero dollars. Holding cost will also cost you for things like utilities, insurance, trash, and any other incidentals. Selling fees for this would be 3 percent or 3.5 percent so that would also cost you 5,250. SO with that you really are in at 129,675.00. 21K for holding costs if doesn't sell in the 6 months, loan payment 1000 a month plus insurance and all other things i would say approximately 500 so if it takes 2 months that is 3k out if it goes to 4 months that is 6k and if it takes 6 months to sell it will cost 9k and you would make all of 11,325.00 for a year of work if everything goes completely right (which never does ask anyone).

I am thinking not a great deal.....

Up to you....

I just did the math.

Good Luck

Any other questions tag me and I will respond.