Hard Money Loan Confusion

[Paul Feijoo]

Hey everyone, I am new to BP, as well as new to flipping. Been doing research for a almost a year now as far as analyzing the market with the intent to fund my own deals. In the case of having to use OPM I was wondering how to calculate my profits as well as monthly payments using a hard money loan. I came across this example story on another website showing a profit of just over 14k. When I entered the numbers on a hard money loan calculator the profit showed over a 70k profit with an added 2&=% cost for broker fee....I am confused on why it did this. Can someone take a look and let me know the difference as well as what to actually expect when involving OPM?

[Carlin Randolph]

@Paul Feijoo it looks like you forgot to put into the calculator how much the money was going to cost you. You put 0% for the taxes, lender points, and the interest rate. With a hard money, the points will be on average 2% (3% if you're new) and the interest about 8-12%. Plus, look up the taxes for the property and put that in any calculation you make for the property. Also, when you do calculations on how much you will pay out every month, do not forget holing costs. Best of luck!