A starting point for estimating your loan amount:

• Let’s assume this is a rehab deal – either a single family or a small multi

• Take the ARV (After Repaired Value) based on SOLD comps with 3 months and a small local area (1/4 mile max in a city, 1/2 mile in a suburb, more in rural areas) less 10% for quick sale value X 60%.  This is your max loan amount. 
• Back out your repair budget (we fund 100% of rehab budget) and the amount left is what is loaned to you at acquisition, unless it is more than the purchase price.  Then you still have to put a minimum of 10% cash down, sometimes more.
• (ARV X 90%) X 60% – Rehab cost = Max loan at purchase
• Rehab is usually funded 100% on top of the max loan at purchase

Example: 

• 300,000 ARV

• 150,000 purchase price

• 30,000 rehab budget

30,000 rehab funded in draws in arrears of construction

132,000 OR LESS funded at acquisition

300,000 X 90% = 270,000 quick sale value plus allowance for declining market

270,000 x 60% = 162,000 max loan amount

162,000 – 30,000 = 132,000

At closing the borrower brings $18,000 plus points plus closing costs, plus funds the start of construction until the first draw

This is an example only to help you.  Every Deal is Different.  There may be reasons we can lend more, or reasons we will do less.  Or not do it at all.  Do not take this as a guarantee.

Loans in Massachusetts and New Hampshire only, you must take title in an entity.