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Updated over 5 years ago on . Most recent reply

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26
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2
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Nicholas K.
2
Votes |
26
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Need Help Understanding Hard Money Loans. Thank You!

Nicholas K.
Posted

I am new to the BRRR process and I am trying to wrap my head around how hard money loans work. My questions are; Does the money pay for the property and the rehab costs? Do I put a down payment down? And if so, does the down payment cover the reno costs and the cost of the property? Or is it just for the property?

Thanks in advance! 

Most Popular Reply

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127
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91
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Andrew Zannotti
  • Killeen, TX
91
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127
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Andrew Zannotti
  • Killeen, TX
Replied

@Nicholas Krogmann as stated below it varies by lender, for my current loan I have 70% ARV, 80% LTV, I had to bring 20% of the LTV to the table, I financed my repairs but it works on a draw schedule, I pay for my renovations out of pocket in 5K increments then call the lender, the come out and verfiy and reimburse me for what I spent.

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