Hard Money How-To: Overview

Financing Cash Hard Money Initial Cash Input 50% of repair cost $6,000 70% LTV with closing costs Will provide 70% of the repaired value after Greater of $215,000 *70% $150,500 $-135,900 $ -15,000 $ -17,534 ARV LTV Hard Money Purchase Price Estimated Repairs Cash to Close 50% of Repair Value Minimum Down Pmt. 70% LTV Cash to Close Cash needed at closing: $17,534 $ - 7,500 $ -6,000 $ -17,534 $ -17,534 13.99% APR 4% Origination Fee 12 mo. Intrest only 12 mo. Balloon Pmt. Purchase Price Cost of Repairs After Repair Cost Closing Costs Total Cost $ -135,900 $ -15,000 $ -150,900 $ -3,422 $ -154,322 Cash Summary Leveraged Summary Leveraged Required Cash for purchase and repair Cash Required to Buy and Repair $17,534 $154,322 Profitability Projections Buy, Fix, Sell Cash Buy, Fix, Sell Finance Buy, Fix, Rent Cash Buy, Fix, Rent Finance/Refi Buy, Fix, Sell Cash $135,900 $ 15,000 $ 1,849 $ 1,573 $154,322 $ 17,210 $215,000 $ 43,468 Purchase Price Rehab Price Closing Costs Holding Cost Total Investment Cost of Sale After Repaired Value Gain on Investment Before Tax Return on Investment 28% Buy, Fix, Sell Finance Purchase Price Cost of Repair Closing Costs + Loan Debt Contribution Required Cash Holding cost After Repaired Value Debt Repayment Cost of Sale Gain on Sale $ 135,900 $ 15,000 $ 10,677 $-150,500 $ 17,534 $ 6,857 $ 215,000 $-150,500 $- 17,210 $ 29,766 Before Tax Return on Investment = Gain - Loan Pmt. * period Initial Investment Assumptions 90 day listing 6% Realtor commission Before Tax ROI = 170% Buy, Fix, Rent Cash Initial Investment Rental Rate Annual Cash Flow $ 154,322 $ 1,400 $ 16,800 30 yr fixed rate 4.0% Intrest 215000 value 80% LTV Before tax ROI = 10.88% Buy, Fix, Rent Finance/Refi $17,534 $ 1,400 $ 1,035 $ 365 $ 4,380 Initial Investment Rental Rate Refinanced pmt. Cash Flow/mo Cash Flow/yr. Before tax ROI = 24.98% Assumptions 90 day listing 6% Realtor Commission *Before property taxes and insurance *Before property taxes and insurance Return on Investment Buy, Fix, Sell Cash Buy, Fix, Sell Finance Buy, Fix, Rent Cash Buy, Fix, Rent Finance/Refi 24.98% 170% 28% 10.88%