How to structure a deal for hard money financing?
Hi all,
I have identified a property that I would like to make my first investment, if possible, and I am hoping to lean on the knowledge of the board.
The property that I have identified is an REO that I have been led to believe I could purchase for 50% of the list price, if I could close quickly. I understand, the basics anyway, of how hard money loans work, but I am wondering if I could get some help on how to structure a deal.
I have been working as a realtor for the past year, after being laid off for over a year prior, so my cash reserves are limited, however, I have a strong credit score, and have about $20,000.00 in credit card availability.
What I would like to do is structure a deal that would cover my acquisition costs, and then have milestone draws to pay for the repairs after they are done, which would pay off my credit cards to free up reserves for the next milestone draw.
Acquisition Cost, including Closing Costs would be around $30,000.00, and I anticipate the repairs will run about $40,000.00. A home in the same neighborhood recently sold for $98,000. which was the appraised amount. However, it is not in the same conditions that the property I am looking at will be.
Thanks for any advice,
Caleb