Hard Money Bankers - Code Found In The Numbers
When someone sends me a project for review, I always try to send them back a max comfort level that I am willing to lend at. I am usually around 65% of what I believe the ARV is. When I send these numbers back to someone, it is usually in a spread sheet that shows the cost break down for the loan. One of the lines on the sheet is the 'cash to close' or 'skin in the game'. This number is usually 15-20% of the deal size. If it is significantly higher than that, it is my secret code way of saying to you that I don't believe the ARV is as high as you think it is. I am not always right, but I can't be on the wrong side of wrong.
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