Loan Economics Deal Calculator For Fix And Flip Hard Money Loans

Hard Money Loan Deal Calculator

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ABL Lends In The Following States

ABL Offers Hard Money Loans In The Following States:

Hard Money Loan Frequently Asked Questions

What is a hard money loan?
Hard money loans are used by fix and flip investors, as well as new construction investors, to cover the costs of purchase and renovation/construction costs for high ROI investments. Hard money works fast and has limited restrictions, so investors use hard money loans to quickly provide the capital they need to move forward with an investment opportunity.

What are the interest rates for hard money loans?
Hard money loans come with different interest rates depending on the hard money lender and the borrower’s qualifications including borrower’s experience level, credit score, project type, and the property’s estimated value. The typical interest rate level is between 8% and 11%.

How do hard money loan interest payments work?
Each month the borrower will have a flat amount due based on the agreed upon interest rate. For example, if you took a $100,000 loan at a 8% interest rate, you would owe a total of $8,000 in interest. Divide that $8,000 by the 12 months of the loan, and your minimum monthly interest payment would be $666.66 per month. For certain construction loans, interest may only be charged on ‘drawn’ funds instead of the full construction escrow. In this situation, your monthly payment would increase as you progress further into the project.

How much money down do hard money loans require?
Most hard money lenders are looking for 20% down so the borrower has enough of their own capital invested into the deal. This number can range depending on the deal, but 15%-20% is the most common down payment required.

What are points for hard money loans?
Also known as the loan origination fee, points are a one-time fee due at the time of loan closing. It is an expense the lender charges to cover the costs associated with initiating and processing the loan. For example: if your loan is $100,000 and 1 point, then you would pay 1% or $1,000. Depending on the lender’s capital structure and liquidity, borrowers may be able to negotiate lower points for higher interest rate or lower interest rate for higher points, depending on how long their project will take. Asset Based Lending currently offers the industry’s only true zero-point option.

Can you refinance a hard money loan?
Yes! Hard money loans can be refinanced into other loan products. Many ABL borrowers will refinance their fix and flip loan to hold the property as an income-producing asset with our rental refinance program.

Before You Invest, Try This Hard Money Profit Calculator

House flipping, or buying and renovating a home for profit, is an investment strategy that has been highly publicized in the media as of late. Television shows dedicated to the subject show successful transactions being conducted using over-simplified math, if any at all. However, flipping houses is an investment that not only carries risk but demands your time, energy, and attention to detail. Many new house flippers make the mistake of overlooking certain deal expenses that may impact their net profit–leaving them with results that deviate from what they originally anticipated.

This is why it’s important to spend a few minutes calculating the various deal economics before delving into such a project. As an investor, you want to uncover as much information as possible that will help you weigh the risk and reward of the project. To help guide you in this process and give you a better perspective on your next fix and flip project, use this free house flipping calculator to determine what kind of results you can expect from your next house flip.*

*Note: While we believe this hard money calculator provides reasonably accurate estimates of a deal’s costs and returns, please remember that these are just estimates. These variables are subject to underwriting, as well as unforeseen expenses that may occur during the course of a deal.
*These calculations are estimates and do not include closing costs. Costs may vary based on property location.

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