Need HML quick

Financing, Hard Money Lenders, Private Money
1

Are there any HML’s out there that lend strictly on the deal?

I have a deal on a SFR in Southern California.

AS IS value: $515k-520k
Offer being posed to Lender for Short Sale 380k.

My math shows 73% of as is value.
Property needs about $10k in clean-up and curb appeal.

After “rehab” value $530k-$540k

I have 10% down $38K
I have a middle credit score of 690
I have very good paying job of over 20 years ($110k+)
I have the $10k for the rehab work.
Exit strategy - clean-up, put it back on market at $515k.
For gross of $515k - 390k = $125k

What I need is the balance of $342k plus 6 months holding/marketing costs $18k for a total of $360k or 70% of low end of as is value.

I’ve laid it all out there…

Any help would be appreciated. ;D

2

God, no one help you yet. Sorry for late reply. It is doable… Just to let you know your calculation is off. Yes, it is still doable.Why, I am a hard money lender.

3

Johnny Q-

Deal has come…and gone.

Lender ended up with the property at $461K.

Which part of my math was incorrect?

john

4

Most rehab lender will do 65 to 80 ARV( After Repair Value)

Using your number

Here is the calculation:

Offer= (ARV x 72%) - ( Repairs + Holding + Closing cost )
Note: if you want low closing or no closing cost will require higher rate.

530,000( ARV) X 72%= 381,600 is enough to buy $380,000 short sale but not enough to do repair of 38,000. ( see below) That 38,000 down is your repair.

10,000+18,000( example: 386,000@ 10% = 38,600 divide by 12 months. Hold for 6 months $3216 IO X 6 months =$ 19,299) +Closing cost $10,000 = 38,0000

What if the property sit longer. Where is your reserve to cover your ass.

381,600 - 38,000 (10,000+18,000+ 10,000) = 343,600 Offer

Some lender max at 80% due to borrower cash. If you had gotten a higher % of ARV, you would not have to put the cash.That is leverage. the 38,000 I would keep just as emergency to cover my ass if the property will not move. Pad the repair alittle.You pull the wall, sudddenly you have water damage behind the wall.

530,000 -418,000( 380,000 to buy short sale + 38,000- Repairs ) = $112,000 profit

If I’m wrong, someone please correct me.