Sample Hard Money Loans Example
Although some Dallas hard money lenders won’t, DFW Investor Lending, LLC, we will loan up to 70% of the after improved value. These funds can include purchase money and closing costs, but MUST also include repair funds. In certain circumstances, the repair funds can be excluded if the client prefers to pay these items out of pocket.
A sample loan would be as follows:
To determine an eligible loan amount, the After Repaired Value (ARV) of the home must be determined first. This is where our appraisal expertise comes in. After measuring the home to determine an accurate square footage, we will continue with an inspection to verify your repair budget and conclude a final ARV. In our example, we shall assume an ARV of $100,000. Also in our example, we will include a purchase price of $62,000, and repairs of $12,000.
After Repaired Value of Home: $100,000
Purchase Price of Home: $62,000
Estimated Repair Costs: $12,000
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Total “Hard” Costs: $74,000
Since DFW Investor Lending, LLC is willing to fund up to 70% of the ARV, the total eligible loan for this project would be:
$100,000 x 70% = $70,000
At closing and funding for the loan, we shall fund the following:
$70,000 total loan
-$12,000 repair escrow
$58,000 net funding at closing
Since the purchase price in this example is $62,000, the buyer would need to have $4,000 cash at closing ($62,000-$58,000=$4,000).
In addition to the $4,000 cash down payment, the buyer would also need to have adequate funds at closing for normal closing costs, insurance, etc.
Each deal would be different, based on a variety of factors, but no deals would result in a funding of greater than 70% of the ARV, and in some cases, may be less. You can use our profitability calculator here to get an idea of how your deal will pay.
Pitch us a deal, and we will tailor make a loan to fit you and your needs!