Having Trouble figuring out the Magic Formula Private Lenders use for Fix and Flips/Rehabs?

Private Money Fix & Flip

Funding Formula

 

 There are many lenders in the private sector who fund Fix and Flip type transactions. Each has different guidelines. The following is an example of the guidelines my private investors look for in a fix and flip transactions. Please call me with any questions that pertain to your specific transaction.

  

Purchase Price:                            $500,000

Rehab Costs:                                $100,000

Total Cost of acquisition:            $600,000

 

Estimated completed value       $1,000,000

 

Borrower Cash Required up front in transaction:  $100,000 (20% of Purchase Price of $500,000)

Max loan $650,000 (65% of final completed value. Note this could include 100% of rehab costs.)

 

Final structure:

Total cost:                            $600,000

Borrower Cash in project:   $100,000

Private Loan                        $500,000 **

 

** excluding loan fees and transaction costs which will vary, case by case. Note this number cannot exceed 65% of Final Completed Value.

 

Conditions:

 

  1. Borrower must have proven experience with fix and flip transactions
  2. Borrowers Credit and Income Profile will affect cost and rates
  3. Appraisal may be required of borrower to determine final
  4. Each transaction is viewed individually
  5. Private Lenders will not lend in some areas.
  6. Up-Front documentation includes an executive summary, personal financial statements on all principles, personal credit on all principles, and photos of subject property

 

Other considerations:

 

Commercial Bank loans are less expensive and may go to higher LTV's. Try them first.

 

We are considered more of a lender of last resort, and can close transactions quickly within a few days (in some cases) and are far more lenient when underwriting a borrower's ability to repay.

 We are strictly lenders and don’t consider joint ventures.

 I’d love to discuss any questions you might have. We’re always interested in establishing long term relationships with solid clients, based on experience, honesty, and profitability.

 I look forward to hearing from you:

 Kelly Bowlin

Private Money Affiliates

866-817-4969

kwbowlin@hotmail.com

privatemoneyaffiliates.com

 

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