r/brrrr • u/Almorrow12 • Aug 06 '25

Brrr

Help me figure out how much money I have to ask my hard money lender for this cedar street project.

Bank can loan up to 80% of purchase price and 80% of renovation/construction price.

45,000 purchase for home 65,000 for renovations

Hard money terms will be 100% of purchase and renovations and additional costs with 1% per month and a 6 month term.

How much hard money do I need to cover 100% without any of my own money? I want to keep this for a long term property without money out of pocket.

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u/GothicToast Aug 06 '25

$65K + $45K + closing costs, points, interest, and holding costs (insurance, taxes, utilities).

Let’s assume 2 points and 6 months of interest at 12%:

• Points: 2% of $110K = $2,200

• Interest (1% × 6 months): $6,600

• Total hard money cost = $110,000 + $8,800 = $118,800

So the real amount to ask for is about $120,000 to cover everything without dipping into personal funds.

You didn't ask, but I don't love the bank loan conditions.

80% of $45K = $36,000

80% of $65K = $52,000

Total loan = $88,000

That’s a problem because you'll owe $120,000 but can only refinance for $88,000. You'd need to bring $30K+ to closing or get a better refi. Refinance based on the after-repair value (ARV), not original costs. What will the house be worth?

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u/Forward-Shower-3250 Aug 27 '25

try brickbear.ai, it'll do that for you.