All Forum Posts by: Mahinda Horapakse

I applied for a line of credit from corevest. I qualified for a $1 million line after much paperwork. Now I'm at the point of closing and they say my closing fees will be $10,000. Is this standard?? I'm shocked. I was never told of such high fees unless it was embedded somewhere in the fine print. I have utilized a LOC with a competitor finance company and got charged $0 closing costs.

Hello, I'm trying to structure my first deal using private money and I just cannot seem to get the numbers to work, even though I'm all in for under 75% LTV. Any feedback on these numbers is appreciated.

This is a SFH located in Ohio. My plan is to do an all cash purchase and rehab and finance out of my private money loan with a conventional loan at 75% LTV.

Purchase price: $85k

Rehab: $20,700

Closing costs: $3k

Total loan amount = $108,700 (70% LTV)

ARV = $155k

Rent after rehab = 1200

Interest rate paid to private lender: 10%

After rehab and leasing, my plan is to refi at month 12 at 75% LTV. 75% LTV of this corresponds to $110k (basically equal to private money loan amount).

However my interest costs after 12 months amounts to $10,870. My other holding costs for 12 months (taxes, insurance, PM, maintenance) amounts to about $6k. Then there's the refi closing costs ($4k). These costs total about $20k, so that puts me in the red by $20k. If I account for rental income post rehab (months 5-12), I'll be in the red just about $12k.

$12k is still a decent amount to be in the red for a property where I'm only charging 10% interest (which I consider close to average) and where the LTV for the private money loan is at 70%. Am I missing something in this analysis? Any input especially from folks with private money experience would be much appreciated! TIA!

I use TCF Bank - they do up to 10 conventional loans nationally with no minimum