Private money. How to determine how much to ask for?

Question

Have a deal at purchase price of 45k and estimate of rehab is 30-40k (ARV is 125-130k). Should I ask for the 75-85k and if I'm under budget just have the excess? Any suggestions would be helpful, or any private money people who could say how they would approach this topic.

This will be my first flip. First 2 deals were wholesales.

Thanks,

Justin

This will be my first flip. First 2 deals were wholesales.

Thanks,

Justin

Nicolas Beaujean · Answer

@Justin Conatser I PM'd you, feel free to reach out :)

Justin Conatser · Answer

@Nicolas Beaujean thanks for the response!

Justin Conatser · Answer

@Brian Gerlach thanks for the response!

Nicolas Beaujean · Answer

@Justin Conatser

@Brian Gerlach is spot on. You definitely don't want to borrow any more than you need to. Although it's good for us as lenders we actually put a limit on it to ensure people are able to pay it back and more importantly, still profit.

Don't forget, the more you borrow the more you pay so if you can swing 10-20k of your own cash into the deal, we highly advise it. Technically speaking based on your deal our max lend would be right in the ballpark you mentioned and would cover the whole thing- as long as your numbers were correct which would have to be verified. Let me know if you have any other questions :)

Best,

NDB

Brian G. · Answer

@Justin Conatser I would ask for enough to ensure you are able to safely finish the project ($90k?) and/or have access personally to a chunk of change ($10k?) jic your rehab goes over budget (it probably will). Make sure you factor in cost of capital, all other holding costs (ie utilities, insurance, etc.) and closing costs to your profit projections. Sounds like fun!