I am new in investing and I don’t understand how to calculate ARV. For example lets say the purchase price is $65,000.00. Money for repairs is $19,004.00. Lets say the lender will loan up to 70% of ARV how is this calculate to get the ARV? Thanks for the info.
What is the home appraised at?
Let’s just say home appraised @ $75,000.00
first you add the 65000.00 to the 19004.00 to get 84004.00.
thats your loan amount.
then you need to find out what the house is going to appraise for based on what fixed up houses in the area are selling for.
so if you bought for 65k and put 19k into it, lets say it apraises for 120k. divide the loan amount by the arv and you get 70% arv
84000/120000= .70 or 70%
hope that helps
Jim that does help but I went to a web site for hard money lenders and t his is the example they used ARV $130,000 Purchase Price $65,000.00 Money for repairs $19,004.00 Loan Amount $91,000.00 Interest rate 18% Monthly Payment $1,365.00. If I calculate as you stated the loan amount would be $84,000.00. I am not sure how they got the ARV $130,000 and the Loan Amount $91,000.00.
the difference of 7000 is probably the points and fees they are charging. some hml’s add the points to the loan amount up front
Old thread but…
Thats a good thing right? I mean, I would rather work with a lender whos not trying to “suprise” me.