Updated about 7 years ago on . Most recent reply
Hard Money Calculation
Hi Everyone,
New to investing, but have been studying and speaking with lenders. I am trying to fully grasp the HML calculation. Assuming I am approved for 65% of the ARV. In speaking with an HML this is basically what I was told:
| Asking | $ 100,000 |
| Purchase | $ 80,000 |
| Rehab | $ 15,000 |
| Total | $ 95,000 |
| ARV | $ 115,000 |
| Hard Money Loan | $ 74,750 |
| "Skin in the Game" | $ 20,250 |
Can someone advise me if I'm doing this correctly? If so, would the following be correct? That my "skin the game" would be $0? Obviously a deal like that would be hard to come by, but for the purpose of this exercise let's assume.
| Asking | $ 100,000 |
| Purchase | $ 55,000 |
| Rehab | $ 19,750 |
| Total | $ 74,750 |
| ARV | $ 115,000 |
| Hard Money Loan | $ 74,750 |
| "Skin in the Game" | $ - |
Any help would be greatly appreciated!