What out-of-pocket expenses will I have? Jordan Brewer
The following are all the possible out-of-pocket expenses you may have associated with a loan with Do Hard Money:
Earnest Money: To get a property under contract, you'll usually need to put up some earnest money out-of-pocket. The standard for this is about $1,000. Although there is no legally required minimum many banks or institutional owners may require a minimum earnest money deposit. Some of our borrowers get properties under contract for as little as $10. It just depends on how motivated the seller is and what they're willing to accept. Also, if an extension is required to your contract deadlines, the contract may also require a per-diem cost to extend the dates. You will also be required to pay this out-of-pocket. Depending on the contract, earnest money may be refundable or non-refundable. You are wholly responsible for protecting your earnest money.
Property Evaluation: If you have already used your evaluation credit or you are not a member of the Find-Fund-Flip system, you will need to pay out-of-pocket to complete a desktop property evaluation to determine your property's ARV and risk levels which we use to calculate the loan amount we are willing to offer on the property. The cost for a desktop evaluation is $250.00. The cost for an onsite evaluation is $400.00. Both are required for a loan to close.
Inspections & Reports: We require a termite inspection on ALL properties which you will be required to pay out-of-pocket. Also, in the event that the property evaluation identifies other risks (such as roof-truss, foundation, mold, meth, or fire damage issues) you will also be required to pay out-of-pocket for inspections or engineers reports to identify the remediation costs associated with these risks.
Cash-to-Close: If your purchase price, rehab costs, points, interest, and closing costs do NOT fit within the loan amount offered (usually 70% of the ARV), then you will need to make up the difference at the closing table with cash. Many of our customers find deals requiring little to no cash-to-close, but our average loan requires about $3K-$10K cash-to-close. However, if you have qualifying credit, as a member of the Find-Fund-Flip system we can help you get up to $150K in gap financing in the form of business lines of credit. You can use this for ANY business related expenses including property evaluations, inspections, AND cash-to-close, so you can close a deal with ZERO out-of-pocket expenses EVERY time. Contact a Customer Success Expert for more details on qualifying for gap financing.