All Forum Posts by: Daniel Elijah Richardson

OK Sure, for this example lets just use 12 months, 3 points @12%. The lender says they will cover 100% of the construction costs and the rest will be towards the purchase price.

So first we want to find 65% of the LTV and 80% of the LTC

- LTV (Loan to Value). ARV x .65

- LTC (Loan to Cost). (Purchase Price + Rehab Costs) x .80

LTV Loan = (200,000 x .65) = 130,000

LTC Loan = (75,000 + 55,000) x .80 = 104,000

So our loan amount in this case would be 104k because it is the lower of the two. The safest for the lender.

Using the terms above, 49,000 will be released at closing and go towards the purchase price. The remaining 55,000 will be held for the construction costs. 49,000 + 55,000 = Total loan of 104,000.

Next is what charged by the lender.

Points = Loan amount 104,000 x .03 = 3,120

Monthly Interest payments would be = Loan amount x 12% divided by 12 months

Monthly payments would = 1,040 (104,000 x .12) / 12

Next is what the borrower must bring

Down payment = 26,000 (the remaining amount for the purchase price. 49,000 from the lender + 26,000 from the borrower = 75,000 the entire purchase price.)

The points mentioned above - 3,120

Closing costs (lets estimate 3%) - 2,250

Insurance - 900

Lawyer fee's - 1000

So in this scenario the buyer would bring about 33,270 to the table.

Remember to factor in carrying costs such as utilities, taxes, agent fees, etc. Based on the numbers I would say this deal is OK as long as the rehab is finished within a reasonable amount of time. There is money to be made here. Overall you are putting up 33-40k and making roughly 25-35k.

Does this make sense?

Of course these rates and terms are different on a per deal basis but this gives you an idea of how to breakdown the loan.

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This guy is saying he is willing to give me the full purchase price plus 70 percent towards repairs depending on the deal @Andrew Michael

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@Andrew Michael could we go over like an example its not real just fr education purposes. Say I have a home under contract for 75k but the home is really worth 200k and needs like 55k in repairs.

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Do hard money lenders require you to pay a down payment when flipping houses I know they will require something with rentals but flipping is different. I have a guy who says he will lend me the money for properties plus 70% for all the repairs does this sound legit. It sounds a little to good to be true.

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@Matthew Rollo Thanks alot Matthew.

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Originally posted by @Chris England:

Hey Daniel just curious on how this deal went for you? I'm considering jumping into wholesaling myself so I'm sure I will becoming across some of the same problems you've encountered. Can you give some details on how you handle everything? Any info helps for beginners. Thanks

What I did was, I pulled up the public records on the property, I found that the lady owed taxes on the condo so I calculated the repairs plus the taxes she owed and any other liens on the property. Then I pulled the com-parables on the condo to get the market value and I divided that by the after repair value and got the LTV. I made sure the LTV was under 70% and I made her an offer she accepted now I have the home under contract just looking for a buyer.

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@Robert Wilson Wow best advice I've seen so far. Thanks a ton

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Please excuse my punctuation.

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I currently have a women who needs to sell her home and condo. I am going to view the properties tomorrow to possible get them under contract BUT I have no idea what to say or do. Should I make her an offer or should I wait until I could get the comps and ARP for the home. I am so confused this is really my first lead that I have on my own.

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Originally posted by @Alexis S.:

call fsbos

Hey Alexis, can you elaborate please.

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Ann Arbor, Michigan

All Forum Posts by: Daniel Elijah Richardson

Daniel Elijah Richardson has started 128 posts and replied 193 times.

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Post: I HAVE NO IDEA WHAT TO SAY OR DO WITH WHOLESALE LEAD !!!!!!

Post: I HAVE NO IDEA WHAT TO SAY OR DO WITH WHOLESALE LEAD !!!!!!

Post: I HAVE NO IDEA WHAT TO SAY OR DO WITH WHOLESALE LEAD !!!!!!

Post: I HAVE NO IDEA WHAT TO SAY OR DO WITH WHOLESALE LEAD !!!!!!

Post: I HAVE NO IDEA WHAT TO SAY OR DO WITH WHOLESALE LEAD !!!!!!

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