Best Hard Money Calculator

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.

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.

Read our blogs: Basics of Hard Money Calculator and Advanced Hard Money Calculator. Also, check our articles on Private Money Leverage and No-Money-Down Loans.