Help determining out of pocket costs fix/flip

[D Higgs]

Need help determining my out of pocket costs (at closing) for this fix/flip deal below. I am confused on what i'm bringing to closing. Can anyone help? Thx in advance.

purchase price: $141k

arv: $240k

rehab: $30k

Hard Money Loan terms: 65% ARV + 11% interest + 2 points + $4500 closing costs

Buy closing costs (inspection + appraisal + title search + title insurance + attorney) : $3500

[Mike Hoover]

What's up D Higgs. First, I don't like this deal. I don't like the loan details (11% with 2-points) and I think you need to be very confident on your ARV and Rehab costs. However you didn't ask for my opinion on that issue.

Let's walk through your question to make sure I have it right. You want to know how much cash you are going to need at closing? Do you have a settlement company you will be working with? If so, they should send you what you need or ask attorney. Does the $4,500 closing cost include the 2-points on your loan & any pre-paid taxes? Also, how did you come to the ARV? Is that what the lender and you agreed?

If so, lender is only willing to put down ($240k x 65% = $156k).   So purchase price ($141k) + lender closing ($4.5k) + home closing ($3.5k) + lender 2 points if not already include ($156k x 2% = $3,120), + any additional pre-payment of taxes etc.  You should check with settlement company.    I’m going to assume no additional costs in math.  $141k (home) + $4.5k (lender) + loan points ($3,120) + $3.5k (closing) = $152,120.  

Your loan should be $156k ($240K x 65%).  

$156k (loan) - $152,120 (purchase + fees) = $3,880 in your pocket at closing.   

The bad is you still need the $30k for rehab.   So $30k (rehab) - $3,880 cash from closing = $26,120 

You should get money at closing but will need to find $26,120 to complete rehab.