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Updated almost 2 years ago,

User Stats

135
Posts
47
Votes
Alon A.
  • Investor
47
Votes |
135
Posts

Hard money loan understanding

Alon A.
  • Investor
Posted

Hey guys 

I would like to understand something 

Purchase price: $270K

Reno: 70K

ARV: 420K


My lender fund 75% from ARV which is 315K , it covers the purchase price  

also he covers 100% or rehab , I need explanation about the rehab , why should they cover for me 100% of rehab , what are they gaining from that ? 
eventually I spend money from my pocket on the remodeling and everything is coming back for me , what is the catch here ? They really financing 100% of remodel , if this is the case , even if the remodel will be 100K so why to save on remodel costs ? I understand the draw process and I have the money in the bank , so as long I can finance it by myself before the draws I’m good ? 

Please help me understand it


thank you 

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