Maybe you’ve thought about buying and flipping homes, but you aren’t sure how to get started. Hard money loans make the process a reality for many people, and they can be a great way for you to get started. These can close quickly and finance properties that need extensive rehabilitation before they can be sold. Additionally, they are based on property value instead of buyer creditworthiness, so you may pay a premium interest rate. Using a BRRRR calculator gives you a better idea of how much a hard money loan will cost you, and how much you are likely you make once the entire project is complete.
Our fix and flip calculator asks for some basic information about the property, closing fees, rehab project, and length of time you expect to have it before selling it. More accurate input information yields better and more accurate results. Before you sit down to get started, gather up documentation so you can provide these figures:
• Purchase price: This can be estimated, anticipated, or the actual amount you have negotiated.
• Value after repairs: Input the expected value of the home after you make the planned repairs and updates.
• Details of the rehab project: You should have a good idea of the cost of your rehab project. This will impact the amount you can make flipping house and is an important component of a BRRRR calculator. Include the cost of materials, labor, and any permits that may be necessary to complete it.
• Turnaround time: Adjust the slide bar to how long you plan to have the house, from when you close on the purchase to when you close on the sale.
• Loan to value ratio: Adjust the slider to match what percentage of the house will be financed.
• Loan fees: There may be origination fees associated with a hard money loan. Enter the points you anticipate paying as part of your loan package.
• Interest rate: You may not know the exact interest rate, but adjust the slider to what you realistically expect to pay. You can play around with this feature to see how different interest rates affect your overall loan costs.
• Taxes: You will be responsible for certain taxes on your purchase, and that affects your profit margin. Enter the rate for recording taxes where the house is located. You will also need to know the current property tax amount.
Once you input the day into the fix and flip calculator, it will generate figures that represent the total project cost, amount of anticipated net profit, and how that figures as a percentage of your investment. You can use these figures to determine if a potential purchase is worth the time and effort it will take to rehab and either resell it or rent it out. Gauntlet Funding specializes in direct private lending and distressed asset financing products. If you decide to move forward with purchasing and rehabilitating a property, we can help you find the right loan for your project. Contact us today at (917)397-2752 to get started on your BRRRR journey.
New York fix and flip loans have been your dream – especially since you watched the flipping of the oldest house on your block. You never thought it would sell again, but after it was fix and flipped it made bank. And you want in on that.
But as you start to pool together your funds you realize you don’t have a real strategy to use. You only know the basics.