Are you looking for hard money, in order to flip houses, or other commercial real estate? Regardless of what you’re planning on doing, there’s several things you need to know about. For example, how much work does the property need? Is it in a good neighborhood? What will the property be worth once the rehab/construction is finished?
Once of the key variables when looking for a loan, is ARV – or after repair value. This is an estimate of what the property is worth once all the rehab has been done on the property. The ARV is one method a hard money lender determines if the investment is a good idea or not. The investor will use ARV to determine how profitable the deal will be. The ARV is something which is determined by looking at the amount of rehab into the property, and by looking at similar properties in the neighborhood who had appraisals done.
Most investors who look for hard money loans, can get up to 70-80% of the ARV. Anything above 70% is typically considered risk, for hard money lenders. ARV is calculated by the dividing the loan amount by the ARV. For example, if your loan amount is $175k and the estimated ARV is $250k, then the loan to ARV will be 70%.
If you’re considering flipping house, rehabbing commercial property, or whatever else – then we can help you. Delancey Street is a private lender, that has many years of experience helping real estate developers get access to hard, and reliable, cash.