Flipper · Snellville, GA · Member since 2017 · 6 posts · 1 vote
Hello BP this will be my First solo fix and flip. My newbie question is below.
Here are the numbers...
73,500 = Purchase house Cash
70,000 = Rehab
230,000 = ARV
I've been speaking with hard money lenders and they are saying "we'll lend up to 70% of the ARV". Well, does that mean that I'll only be paying points and interest at closing with the 70k (rehab) fully financed?...because with the all cash purchase I'm at 66% of ARV. (Of course they'll do their own appraisal and figure from there).
Hello BP this will be my First solo fix and flip. My newbie question is below.
Here are the numbers...
73,500 = Purchase house Cash
70,000 = Rehab
230,000 = ARV
I've been speaking with hard money lenders and they are saying "we'll lend up to 70% of the ARV". Well, does that mean that I'll only be paying points and interest at closing with the 70k (rehab) fully financed?...because with the all cash purchase I'm at 66% of ARV. (Of course they'll do their own appraisal and figure from there).
The "we'll lend up to 70% of the ARV" refers to only a portion of the equation. Most HML's look at down payment as the borrower's skin in the game (usually 10 to 20%) and then finance the rehab 100%. In your case, you're ahead of the game because you paid cash. With that in mind and if your numbers are accurate compared to their appraisal, you'll be paying only closing costs including points on the rehab portion at close.