Hard Money Loan Calculator

How this calculator works

Hard money lenders limit the loan several ways at once: a percent of total cost, a percent of the after-repair value, and separate limits on the purchase advance and rehab funding. The smallest limit wins. This calculator computes each one and shows which binds.

The loan is split between money advanced at closing, a rehab holdback released in draws after inspections, and sometimes an interest reserve. Whether interest is charged only on funds drawn or on the whole commitment from day one can change profit by thousands.

Each limit is computed separately; the commitment is the smallest, then split into the closing advance, rehab holdback and interest reserve.
A month-by-month cash flow tracks interest, rehab spending, draws, holding costs, extensions and the sale.
Profit is computed two ways (from the cost totals and from the cash flows) and they must match, so nothing is counted twice.
Peak cash is the most money you have in the deal at any point, which is what return is measured against.

Worked example

Example values are illustrative, not quotes or market data. These are the numbers the calculator above starts with.

Inputs

Purchase price: $200,000
Buying closing costs: $4,000
Rehab budget: $60,000
Contingency on rehab: 10%
After-repair value (ARV): $360,000
Selling costs (% of sale): 6%
Months of rehab: 4
Months from purchase to sale closing: 6
Holding costs per month (taxes, insurance, utilities): $600
Financing: Hard money loan
Max loan-to-cost (% of purchase + rehab): 90%
Max loan-to-ARV: 70%
Purchase advance (% of price): 90%
Rehab funded (% of budget): 100%
Interest rate: 12%
Points (% of loan): 2%
Lender fees ($): $1,000
Interest charged on: Only the funds drawn so far
Loan term (months): 12
Number of rehab draws: 4

Results

Profit: $45,080
Peak cash: $54,880
ROI on peak cash: 82.1%
Loan commitment: $234,000
Binding limit: Loan-to-cost limit (90% of purchase + rehab)
Interest: $12,540
Break-even sale: $312,043

Common questions

What is a typical hard money loan?

Terms vary widely by lender, borrower experience and deal. The example terms are illustrative only; get written terms from the lender.

What is Dutch interest?

Interest charged on the full loan amount, including rehab funds not yet drawn. Non-Dutch loans charge only on money advanced so far.

Why do I need more cash than the down payment?

You pay for rehab work before each draw is reimbursed, plus points, closing costs, interest and holding costs along the way. Peak cash captures that.

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Estimate only. Actual loan terms, eligibility, insurance, taxes, and settlement charges require verification. These are planning estimates, not a lender Loan Estimate, Closing Disclosure, appraisal, or approval. Michael O'Neal is a real estate broker, not a lender, appraiser, attorney or tax adviser.