How much cash-to-close will I need? Jordan Brewer
If you are a member of the Find-Fund-Flip system we do NOT REQUIRE a minimum cash-to-close.
We will lend up to 70% of the After Repair Value (ARV). As long as your purchase price, rehab costs, points, interest, and closing costs fit within that 70% there will be no cash-to-close. Otherwise, you will be required to cover all costs that go above the 70% of the ARV.
Unlike most hard money lenders, there is no 10% of purchase or 20% of loan amount required. We do not have any policies or rules requiring you to cover your own rehab costs or even to pay your own points, interest and closing costs. If your deal is good enough we will cover EVERYTHING but earnest money and some minor inspection costs.
We do an onsite evaluation to determine the After Repair Value (ARV) of the property and the risk level. If there are no major risk factors (railroad tracks, high crime, fire damage, etc.) then we will lend you up to 70% of the ARV.
For example, if the evaluations calculated the ARV of your property at $200K, we would lend up to $140K. If your purchase price was $90K, your rehab costs $20K, and your points/interest/closing $30K, you wouldn't have to come to the closing table with any cash-to-close.
If there are risk factors present, the loan amount can be reduced to as low as 50% of the ARV and this could affect your cash-to-close. The cash-to-close will be finalized once we receive a complete, vetted contractor estimate to determine the cost of the rehab. The cash-to-close needed will be provided to you when you receive your letter of intent (LOI).