@Jarred Watley based on the HML's ARV, this isn't a good deal at all. If you are looking at 80K to buy and fix, with an end value of 89K, you won't make any money. In fact, you would lose money for sure.
If the ARV truly is 110K, then the deal isn't bad. If the ARV is 100K, it is too tight in my opinion. Anything at 80%+ (purchase + repairs / ARV) isn't going to make you money using HML.
The bigger question should be how did the HML come up with only 89K and your other adviser's are coming up with something much higher?
I don't understand why the closing costs are so high can you explain
@Jarred Watley I can't speak for that HML, but my guess is the closing costs are that high for a few reasons.
1. That is where they put in there fees (points, prepaid interest, etc).
2. taxes, title fees, state fees
3. if they are only lending up to a certain % of the ARV, then you most likely are responsible for the difference between the overall costs (purch, repairs, closing costs) and their loan value.
Like I said, without seeing their info I can't tell if that is the reason or not, but my guess is that is why it is so high.
@John Thedford The reason why the closing costs are so high is because that $$ includes the down payment that he would need to put to close the deal... along with the points and attorney fees.
@Sean Blomquist 80%!?!?!?! is that how crazy this market is getting that now buying 80 cents on the dollar makes sense? WOW, I usually say anything over 60%... I am not taking it.
@Jarred Watley Hard money Lenders are not in the business of taking risk... That is the first thing. Secondly, they do the apprasial to avoid any mistakes or bullsh!t that agents try to tell people in order to get the sale at the end. Remember, just because she/he says its 100-110k.. doesn't mean it's true.. I had this happen to me many times, one agent tells me "yea we can EASILY sell this house for 260k... and then I talk to 2 other agents and they both say 210-220k.." Happened many times, always get opinions from ATLEAST BARE MINIMUM 3-4 agents, and never mention the price the previous agent said to not spark bias.
Any other questions with hard money or REI , let me know. I am always here.
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