Getting Started on Analyzing using Hard Money Loan

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My wife and I have our first rental property under our belt: a single family residence, purchased in end of 2016, fixed up, and started renting in May 2017.  We quickly learned that we want to scale and make the move to commercial/multifamily/apartment building investing.   I am new to commercial obviously but am diligently trying to get myself acquainted with all the strategies and terminology, so please forgive my lack of knowledge on some of these things.

I am trying to gain my practice and experience in analyzing deals.  In my situation, I have very little cash on hand to finance the deal, therefore I will try and analyze deals with financing via a hard money loan.  My real estate agent told me to assume 20% down and ~12% interest rate. My questions right now are primarily for me to determine how much cash I will need to make a deal happen.  

  • what else should I be accounting for in order to determine how much cash I will need to close on a property?  Looking at hard money lenders' websites, I assume I should also account for origination points ( is percentage off of loan amount?) and in my case transfer taxes (PA properties and I live in NJ).  Are there typically any other costs associated with closing?  I am so used to typical conventional banks that I am wondering if things like escrows are needed for property taxes, insurance premiums and first 3 months, recording fees, etc.
  • What are typical terms with hard money lenders? are loans based on LTV, LTC, etc? In other words, is that based on the purchase price, Project cost (purchase price + repairs), after repair value, etc. I assume this varies between lenders but figured I'd ask and see what is typical and/or get clarification on what this means.

I have my own spreadsheets set up but I definitely want to be conservative and make sure I really nail down my analysis so I don't underestimate any costs, so here I am asking my fellow peers what I may be missing.  Thanks in advance!

- Arjay

@Arjay Vergara - It will be challenging to fill in all of the blanks without knowing what lenders in your area offer as far as LTV, cost, etc. I would start there and see what your cost of capital and equity requirement are then you can see if you are in the ball park. 20% down at 12% seems high, but it depends on your area. Talk to as many as you need to until you understand it all.