Hard Money Calculator That Rocks
To-the-point. Simple to use. Our hard money calculator comes with charts and illustrations that help you better understand your deal’s profitability and return on the cash you’ve invested. It also offers underwriting comments and recommendations. Using this calculator is like talking to one of our experienced underwriters. Ready to give it a try?
Hard Money Calculator & Deal Evaluator
Need help using our Hard Money Calculator?
We have a great video that walks you step by step on how to get the most of it! Still confused? No problems! Call us at 240-436-2340, and we will be glad to walk you through.
Feel like your deal has potential?
Great! If your property is located in Maryland, Washington, DC, Virginia, or Delaware, we are here to finance it. We are a direct private lender. We offer a winning combination of competitive pricing, personal support, and local expertise. Start the ball rolling by calling us at 240-436-2340 or fill out our online application.
Hard Money Calculator Glossary
The After-Repair Value (ARV) is an expected market value of a property once the renovations are completed. It’s determined by sale prices of similarly renovated homes in the vicinity that are of the same size, style, and vintage. For more information on how to determine ARV, click here.
In our hard money calculator, ROI is determined by dividing the profit generated by the investment by the overall cost of that investment.
Lender’s points are fees paid directly to the lender at closing. Points cost 1% of the balance of the loan. If a borrower buys 2 points on a $200,000 home loan then the cost of points will be 2% of $200,000, or $4,000.
Transfer and recordation taxes are taxes charged by the state and the county to transfer the ownership of the property from one entity to another. In our area, it is customary for the transfer and recordation taxes to be split evenly between the buyer and seller. If you are a flipper, you will need to pay a portion of the transfer and recordation taxes when you are buying and selling the property. Your title company will determine the exact amount but you can also find visit this DC government page and this Maryland Taxes page to learn more.
Percentage of borrower’s cash contribution that comes back to the borrower as profit amortized over twelve months. Let’s assume you’ve invested $30,000 into a transaction. You sold your property after 12 months and walked away from a closing table with $40,000 in your pocket. $30,000 covers your initial contribution and $10,0oo is the profit you’ve made on investing this $30,000 for 12 months. 10K is roughly one-third of the $30K you’ve invested which means you’ve annualized return on cash is 33%. If you reduce that holding period from 12 months to 6 months, the annualized return on cash goes up to 78%.
Title company charges are the total fees charged by a title company to safely transfer the title from one owner to another. They might include title abstract, title insurance, closing fee, notary fee, tas certificate, recording service fee, and various admin fees. These fees vary state and by the title company. Please contact the title company of your choice for more details.
If your loan is secured against a property, a lender would want to have this property insured. Your lender would advise you on a type of insurance policy to get. If you are rehabbing a property, your lender would most likely ask for the builder’s risk insurance policy. To learn more about the right kind of insurance policy for your rehab, please click here.
Commissions charged by a licensed real estate agent to help you buy or sell a home. It’s customary for the seller to pay commissions for both buyer’s and seller’s agents. What it means is that you most likely incur this expense while selling this property. The real estate agent’s commission in the DC area typically doesn’t exceed 3% and can be lower than that.
It is not uncommon for a buyer of a property to ask a seller to contribute a percentage of the sales price towards closing costs. Depending on the program, a seller can contribute up to 6% of the sales price in closing costs. Such contributions to new buyers decrease your profit and, because of that, are important to consider when evaluating a transaction. Consult your real estate agent for more details.
This is your contribution to the transaction and includes all the funds you need to buy and rehab a property. It also includes costs associated with obtaining financing and transferring the property in your name. Typically, a part of the contribution you make at closing will be coming back to you in a series of draws as you move through different stages of your rehab.
Your maximum loan amount divided by the sum of your purchase price and rehab costs.
The money you make after recouping all costs associated with buying, financing, owning, and selling an investment property.
Ready to get pre-approved with us? It’s quick, simple, and free.
You might have had a great time using our hard money calculator, but nothing replaces human interaction. Let’s discuss what all these numbers mean for you. Even if you don’t have a particular property in mind, you still might want to get pre-approved for a loan. Why? First, you might want to have a better understanding of your budget. Knowing your price ceiling helps focus your search on a particular type of home and on particular geographic areas. You also might want to find out what interest rate you qualify for. Last, but not least, to start making offers, you will need a proof-of-funds letter. Proof of funds is a document that states that you’re pre-approved for a hard money loan with a reputable private lender. Our proof of funds letters are considered cash offers, so you can effectively compete even with the most well-heeled investors.
How to make the best out of our hard money calculator?
As the saying goes, junk in, junk out. Make sure you use common sense when using the hard money calculator. Specifically:
Be Realistic About Your Rehab Budget. Do not lower expenses to increase your profits. For example, if the calculator shows that a transaction is not as profitable as you might have not hoped, resist the temptation to lower the renovation budget. First, if your budget is too low, any private lender with experience will flag it during the renovation process. Even worse, if your transaction is approved and your loan is funded, an unrealistically low budget means one thing – you will run out of funds mid-project.
Use Accurate ARV. Sometimes, it’s difficult to estimate the exact after-repair value of the property. If you are unsure of that exact number, it’s wise to use the range of values. For example, you might estimate that once renovated, your property will sell between $450,000 and $475,000. In this case, use the lower number of $450K to evaluate the profitability of your transaction. If you are satisfied with your profits using that lower number, you can safely say that the deal makes sense.
Play with the Terms of the Loan, but Do So Responsibly. Among other factors, your transaction profitability depends on how long you hold the loan. The longer your loan is outstanding, the more you pay in taxes, insurance, and interest. Use the calculator to see how your profits change if you hold the loan for six months versus twelve months. However, unless you are a seasoned real estate investor, avoid making unrealistic assumptions about how long it will take you to renovate, market, and sell your rehab. Very few of our borrowers can accomplish the project in three months, and only the best can flip a home in six months.