Posted by John Corey on May 03, 2006 at 02:22:31:
What you have presented is about right. Remember the closing costs (including the points).
On the other hand…
Hard money that requires a minimum credit score is not hard money. Lets call it non-conforming as that is Ed’s label.
The LTV at 90% of ARV is very high for hard money. Great if you can get it. Definitely one reason why a credit score is going to be checked.
8%-11% is really cheap money and 3-6 points is light to about right.
1-2 year prepay sounds very high but you did not say how large the pre-pay is. A pre-pay of 1 month given the LTV, the interest rate and the points would be fine to most borrowers.
You are not talking about hard money these terms. The terms could be just fine if all you need is the 620 credit score. You will have to make that decision.
John Corey
hard money calculation - is this right? - Posted by def
Posted by def on May 02, 2006 at 18:56:42:
ive been talking to a few hard money lenders and private lenders and i wanted to clarify a few numbers.
i find a rehab property and negotiated a purchase price of $150k. comps show after repair value of $225k. rehab will take 2-3 months to complete. property will be refinanced conventionally after 3 months and exit strategy will be seller financed.
i found private financing for 90% ARV, 8-11% interest only, 3-6 points, 1-2 year prepay(can be bought down), FICO 620 minimum
$225k after repair value(ARV)
$205k private lender (90% of ARV)
$150k purchase price
$55k left for rehab funds
$20k actual rehab costs
am i on the right track?
Re: hard money calculation - is this right? - Posted by jason
Posted by jason on May 03, 2006 at 09:29:51:
dont forget holding costs