How much do hard money loans cost and how can I calculate my payments? Indy real estate examples.

by | Indy Anna, Real Estate Investing

How much do hard money loans cost and how can I calculate my payments? Indy real estate examples.

Whether or not you get a hard money loan or not, you should know the costs of using hard money and how it compares to your other options.  In this class I’ll go over a real-life example deals but to start here’s what I’ve been learning about HML.

First of all, THANK YOU again for making this channel the number one channel for Indiana real estate on YouTube according google analytics and SocialBlade info for BigReia.com.

This is a quick video I made about  a Hero’s experiment…

How much do hard money loans cost and how can I calculate my payments? Indy real estate examples.

Indy Anna Explains…
– My little experiment with the financing and HML/PML loans and how you’ll see the naked truth about funding and financing deals.
– How much does hard money really cost and how can to calculate how much money ou need and what your monthly payment will be on the hard money.
– Also more on our 20k-30k Indy flips and a few updates and how to get involved.

So I’m learning about hard money loans.
– I’ve never done a deal like this where it was just me, ironic since I’ve actually been a HML but there have always been others involved so this time I wanted to learn it from the ground up.
– To buy with hard money is almost like buying on a credit card (which we did lol, check out our class on that) and it is new to me so I invite you to correct me if I get something wrong.
– First we’ll talk about the requirements, costs and then the monthly payment.

The hard money loan requirements:
– Often they want to see money down, usually about 20%.
– Then the rehab will be split into categories and you will be given a draw but the first draw you come out of pocket for.
– So if the first draw is $5,000 – $10,000 for example (common) then you need the down payment AND this amount, in the examples we have not this is close to $25,000 – $35,000 of immediate cash needed.

Now the monthly payment, this is how two of my HML calculate it:
– Let’s say it is $90,000 at 13% = $11,700
– 11,700 / 12 = $975 a month (interest only)
– Then you pay $150 per inspection for the draws so that could be $450
– Then with 1-2 points that means you are paying at least $975 a month and over the course of 3 months your total costs are easily $4,000 – $5,000.  So you can easily be paying $300 – $400 a week as soon as you close so you MUST have a team that can move fast because time is not on your side.
– That is on TOP of having 25k-35k up front.

This can still make sense if you are making a good spread, it is just important that you know how expensive this money is.
– As part of my experiment I’m helping many of you do these 20-30k Indy Flips but I’m also doing them myself.
– I’m using all the main methods of buying to compare the profit: cash, partner, private money, hard money and wholesaling.
– This way you guys will see exactly how much money is made (these are all similar deals) and what routes to money make the most sense.

I’m doing this because you asked for it and I haven’t seen a breakdown like this, you’ll see exactly how good/bad these deals turn out based on the financing and then you can judge for yourself the best way to acquire.

Also remember “The Rolodex Model” you can see it at:

https://www.BigReia.com/people

– As you’ll see we’ve been doing entire Models and buying bulks of houses just by using the resources and contacts on that page.
– I think there are about a dozen or so new real estate investors who did their first deal by using that page as a Self Serve.
– So remember even if you aren’t financially in a place to be an investor just yet, you can start from zero and do deals just by helping the Homeys on that page so feel free to use it anyway you like.

Okay so stay tuned and you’ll see even more great progress as build the Indy Anna REIA even more and please remember I’m learning too so if there’s something that you notice I’m missing please let me know.
– I’m only going through the whole process of different financing because you asked about it and so that I can help you see the whole picture.
– This is much more work than necessary but if it helps you then it is worth it.
– To be an investor you can email or text me: Love (at) BigReia.com 317-969-5619.

Also remember to…

Make the Universe Smile.

Thanks so much!  = )

Want more (brilliantly) EPIC posts of real estate investing and bidness badasssery...?

There is a great post and class on the 38 Ways to Buy Apartment Buildings Zero Down with Pet Policies, and here are some other helpful and EPIC posts... for starters as a real estate investor if you ever want to build a business that makes you 30 grand a month then you MUST do this...

Wanna Create Generational Passive Income Buying Real Estate and Small Businesses?

Here's a class on exactly how to make $30,000 in passive income as an out of state Indy landlord.  Exactly how many Indiana rental properties do you need to make 30 grand a month.  Anna can you help me invest in Indianapolis turnkey real estate investment properties?

There's also a great class Azam did on how anybody can retire in the next 1-2 years with $30,000 a month in passive income by buying and selling businesses zero down.  What about Micro Flipping?  We have a great class on how to start micro-flipping real estate zero down from your house and make $500/day, speed wholesaling 101.

There’s also another great class on how to buy apartment buildings zero down that you can check out as well.  This relates directly to growing income on rental properties.  Speaking of which make sure to check out our epic page on 14 ways to avoid tenants from hell.  Also we have a great post on how to make build a "six figure a month" real estate wholesaling business.

Also here is a post on how I did this and I flipped a house off Zillow for 30.  Also you can check out the post on five steps to flip a house right off Zillow for 40 grand.  You can also check out our other epic post on 57 ways to make money with vacant land.

Here’s another post on how a Hero flipped a house off Zillow and made 40k in a few weeks while he was learning to read.  Also you want to check our post on the EPIC $25 million letter and the copy writing lessons for real estate investors, you'll love it.  Also you can see how ONE letter is making me $9,000 a month.  Also you can check out the post on 101 FREE places to advertise your houses.

Also check out the "SA" class and your REAL chances of create social mobility and income ascension with your real estate business.  Brilliant stuff.  Also there is a great post on the ONLY way you'll ever make 30 grand a month as a real estate investor and/or business builder.  Another brilliant class with a free downloadable Investor Guide is about 19 Ways to Make $10,000 a Month by Helping Tired Landlords.

Plus make sure you check out Azam's post on how to hire a realtor that makes you $10,000 a month... while you sit back with your shoes kicked up on your desk and fingers folded behind your head.  Also there is a great post on how to make five grand a week from putting out signs.

Also we have some great posts on 30 ways to buy real estate with no money down.  That is a two part series so make sure to watch the second part on the 30 ways to buy real estate zero down and with no loans or credit.  I also get questions about our "Epic Flipping" and how to turn $1 into over $25,000 by flipping ordinary items for exponentially high ROI.

And don’t forget our EPIC page on 100 FREE ways to find motivated sellers, we are making the number one page in the world on FREE ways of finding motivated sellers.  Also check out how I find motivated sellers from code violation properties, and also how I make over $1,500 a week giving investors access to that list. 

Speaking of lists, for a list of the "Good People" and My Indy Anna Homeys - this is a FREE list of EVERY possible contact that you'll ever need to build a real estate business in the Indianapolis or the Midwest.

You can also get a LONG list of every contract, piece of paperwork and legal document that you'll EVER need for your real estate business all FREE to download.

Also perhaps the most important class Azam has done is on the "Frequency of Thought" and how to use the laws of quantum physics to rewire your brain, attract brilliance like a lightning rod and be the best version of yourself.  Check out this epic 3-hour class on Quantum Real Estate.

When I first go started I thought wouldn't it be great if somebody put together ONE list of every possible contact that I would ever need to build a passive income with Indiana real estate - or any Midwest real estate?  Well that's exaclty what I did with our “People Page” here it is:

A totally FREE list of every possible real estate professional contact you’ll ever need to do unlimited deals, start and scale your real estate business and create generational passive income with real estate anywhere Indiana or the Midwest.

Stay here at BigReia.com and you’ll become allergic to being an LC and addicted to improving the world and creating Income Ascension and Social Mobility for you and yours… 

Thanks so much!  = )

Make the Universe Smile.

~ Indy Anna
Love (at) BigReia.com
(YES that's my actual Direct Line and I really do answer lol, so please text me first Thx!)

Free Comic Book Reveals:

100 FREE ways to find motivated sellers.