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Updated about 9 years ago on . Most recent reply

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106
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Joe Schaak
  • Investor
  • Stillwater, MN
44
Votes |
106
Posts

How To Calculate Return on Money

Joe Schaak
  • Investor
  • Stillwater, MN
Posted

I've heard some people who are flipping homes offering 20-25% return on money when looking for private money. How is that calculated? Are they figuring in points offered as well as the percentage rate on the loan? Thanks!

Most Popular Reply

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264
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161
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Ben Stoodley
  • Lender
  • San Diego, CA
161
Votes |
264
Posts
Ben Stoodley
  • Lender
  • San Diego, CA
Replied

I agree with @Jason Hirko on this. In my experience, the vast majority of my clients use our company to finance the majority of the deal (80% of purchase + 100% of rehab costs), then they bring in partners for the down payment (20% of purchase + closing and holding costs). This is for CA where the price points are very high, so even though they only have to come up with 20%+, it still equals $100k+ , which is a lot of money out of pocket for one person for one deal. So the advantage of JV deals, is that you wouldn't have to spend all $100k yourself, then you can use your personal capital to do this on multiple deals at once. Hope this helps @Joe Schaak

  • Ben Stoodley

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