Get 100% Financing With Hard Money

hi I'm Cory Dutton I'm a private money lender and today I want to talk to you about how to get 100 percent financing on your real estate deals but before we get started I want to just give you a quick disclaimer about that because there's a lot of hard money at lenders out there that are offering 100% financing and they're a total scam all they want to do is just take an upfront fee from you they have no intention of ever giving you a hundred percent financing so definitely beware of scams out there lenders that are saying that they're gonna give you 100 percent financing because just remember if it seems too good to be true it probably is so let's dive right in to what we're talking about today which is how to get 100% financing on your real estate deals I mean that's what you really want to know right so let's dig into that now okay so you're out there and you need money for your real estate deal so you either have rehab funds available and they're ready to go and all you need is someone that will fund 100% of your purchase price of the property okay so that's one type of 100% financing where you just need the purchase price 100% of the purchase price you've got the repairs taken care of they're already funded they're set aside okay the other one is for 100 the other way that you want 100 percent financing on your real estate deal is if you're looking for a hundred percent of the purchase price and a hundred percent of the repairs so you don't have the repairs set aside that's where you're gonna need that hundred percent of the purchase price and then percent of the repairs so let's start with when you have the repairs already accounted for they're taking care of their setup aside where your money borrowed money whatever you've got the funds for the repairs and you just need a loan for a hundred percent of the purchase price so you can structure that as an 80/20 loan or a 90/10 loan so what do I mean by that let's start with the 80/20 when I say 80/20 I mean 80% of the purchase price and 20% of the report purchase price equals a hundred percent of the purchase price so how do you do that well you get hard money lender like me to loan you 80% of the purchase price as a first position loan in a first position and then directly behind that you're gonna get another lender usually a gap lender maybe a partner but someone to lend you that 20% in a second position behind that first position loan at 80% so we've got 80% and 20% that equals your hundred percent of the purchase price so but what is a gap lender okay so that gap lender is that person or that lender that's gonna come in a second position behind that 80 percent hard money lender and the gap lender is a lender that's gonna gap that difference between that 80 percent that hard money lender will do and that 20% you need to get to 100% of the purchase price now what's a gap lender again check out this video that we already did on this topic on our youtube channel called how to tell the difference between a bridge loan in a gap loan that will totally help you understand the difference between a bridge loan or hard money loan and a gap loan okay so then we already said the 90/10 same concept you've got a hard money lender that's going to lend you 90 percent of the purchase price and a first position and then you've got a gap lender to lend you 10 percent of the purchase price in a second position behind that first position lender to get you a hundred percent of the purchase price okay so that's how for those of you who have your repairs already set aside and they're ready to go and you need a hundred percent of the purchase price that's how you're gonna get a hundred percent financing on your deal by structuring either an 80/20 or 90/10 now let's say you're out there and you don't have money for the purchase and you don't have money for the repair so you're looking for a hundred percent of purchase and a hundred percent of the repairs now again quick disclaimer once again a lot of lenders out there are offering that type of financing a hundred percent financing will will fund a hundred percent of the purchase price and one hundred some of the repairs well again if it seems too good to be true often it is okay but there are some hard money lenders out there that are doing that they are going to give you a hundred percent of the purchase price and a hundred percent of the repair so good news there are some real legitimate lenders that aren't just trying to scam you and promote a false loan program they actually are offering it so but how do you get approved for that I mean how do you get qualified for the hundred percent of the purchase price and 100 percent of the repairs you're wondering you're scratching your head well here's how the lenders that will lend you 100 percent of purchase and a hundred percent of repairs are going to determine your loan amount via an appraisal or a broker's price opinion based on the after repaired value or a ARV okay now what do they do they get the appraisal they get the BPO for the after repaired value whatever that value comes back as they're gonna give you a percentage of that amount and that would be your loan amount okay so that's how they structure that now some lenders will do will lend you a loan amount of sixty five percent of the after repaired value or ARV some lenders will lend you 70% of the ARV and I've even seen some lenders out there lending 75% of the ARV now are they real don't know but I definitely seen it advertised so let's do a quick example okay this is this will make it a little bit easier for you to understand this concept okay imagine you've got a house you're buying for a hundred thousand you've got 50 thousand in repairs and then you're after repaired value for this property is two hundred and thirty thousand well good news the appraisal or the BPO comes back at the two hundred and thirty thousand so you were right and the lender ordered that appraisal for the BPO they get it back and they say wow okay we'll induce 65 percent of the after repaired value well 65 percent of 230,000 in this example would give you a loan amount of 149 five well that's gonna cover you're a hundred percent of your purchase price and almost 100 percent of the repairs less five hundred dollars because remember your purchase price was a hundred thousand your repairs were fifty that gives you a hundred and fifty thousand that you need to get a hundred percent financing and if the lender is giving you sixty five percent of your after repaired value of two thirty well one forty nine five is five hundred dollars short of that one fifty so essentially you're getting darn near close to one hundred percent financing in this example well hopefully that helps you understand the different types of financing that is out there for you if you're looking for one hundred percent financing on your deals now you have to determine are you just looking for one hundred percent of the purchase price and if so how will you structure that using a hard money lender in a first position at 80 percent or 90 percent and a gap lender in a second position at twenty percent or ten percent like we used in the example of the 80/20 and ninety ten or like I said before if you don't have funds for the repairs and you're looking for a hundred percent of purchase price and a hundred percent of repairs at least now you'll understand how a lender will approve you for that approve you for that hundred percent financing that you're seeking this is Corey debt and I'm a private money lender if you think that someone you know could benefit from this please share it with them like and subscribe to get more content like this and if you have any comments please leave them in the comment section below thanks for watching

Channel: Private Money Utah

Views: 7,542

Keywords: hard money, hard money loans, 100% Hard money, hard money lender, 100% real estate financing, hard money 100%, private money loans, private money lender

Id: g0GHq7PWygM

Length: 8min 27sec (507 seconds)

Published: Fri Jan 03 2020