Fix and Flip Loans in ,
Champaign, IL has 50 fix and flip lenders serving the city. In this city, the mean loan amount is $298,000. Interest rates on hard money loans issued to Champaign investors average about 10.1%. The typical note issued in the city is 31 months in length. The mean origination fee for loans is 3.3 points. Lenders offer on average a 78% loan to value on deals in Champaign.
Loan Example 1
Bettie closes on a $240,000 rehab project in Champaign, IL, using a fix-and-flip loan from Coastal Finance Corporation . The borrower will need to contribute 35% of the sales price in cash to closing based on a 65% loan-to-value stipulated by the lender. This makes the loan principle from Coastal Finance Corporation $156,000. The interest rate on the loan is 13% for a length of 12 months and the company requires a five point origination fee at closing. The interest payments are to be paid monthly and the principle amount will be paid back after the property sells.
In accordance with the parameters of the loan, Bettie will be required to pay a $7,800 origination fee in addition to 35% of the sales price, or $84,000, based on the 65% LTV. Coastal Finance Corporation will collect $1,690 in monthly interest from the borrower. This is calculated by taking the total loan amount of $156,000, multiplying that by the 13% rate of interest, and then dividing that number by 12. If Bettie achieves her goal of a $336,000 sales price when the loan expires, she would earn a total profit of $67,920 after repaying the principle amount and deducting the money she brought to closing, the origination fee, and the monthly interest payments.
Loan Example 2
Cara is a real estate investor in Champaign, IL. She finds an older townhouse for a rehab project and obtains a fix and flip loan from Assurance Finance Company with the following paramters:
$170,000 sales price
55% loan-to-value (LTV)
12 month term
13% interest rate
2% origination fee
Cara intends to sell the property when the note expires for $212,500. If she succeeds, the final numbers would be as follows:
$212,500 sales price
- $93,500 principle (55% LTV)
- $76,500 cash paid at closing (45% on 55% LTV)
- $1,870 origination fee (2% of the $93,500 principle)
- $12,155 total interest paid (12 months x 13% interest)
= $28,475 total profit (doesn't include taxes or renovation costs)