Hard Money & Fix-and-Flip Calculator

Understanding Hard Money & Private Loans

If you are looking to purchase a distressed property, rehabilitate it, and sell it for a profit, traditional bank financing simply won't work. Banks refuse to lend on properties in severe disrepair. Enter the hard money loan (often referred to interchangeably as a private money loan or hard cash loan).

Hard money lenders are asset-based lenders. Unlike traditional mortgages that scrutinize your W2 income and DTI (Debt-to-Income) ratio, private money lenders care primarily about the property itself. Specifically, they care about the "deal spread"—the gap between your total cost and the property's After Repair Value (ARV).

Dual Constraint Underwriting: LTC vs LTV

Our hard money lender calculator is built using professional underwriting standards. Private lenders protect their downside by capping the loan amount at the lesser of two metrics:

• Max Loan-to-Cost (LTC): This ensures you, the borrower, have "skin in the game." Most lenders will cap the loan at 85% to 90% of the total project cost (Purchase Price + Rehab Budget). You must bring the remaining 10% to 15% to the closing table.
• Max Loan-to-Value (ARV LTV): This ensures the lender isn't overexposed relative to the final value of the home. Usually, hard money lenders strictly cap the loan amount at 70% of the ARV. Even if your rehab budget is massive, if the neighborhood doesn't support the final ARV, your loan will be capped.

Calculating Your Interest-Only Payment & Points

Hard money is expensive capital. Because the lender is taking on massive risk (funding a house with no roof or stripped plumbing), they charge premium rates.

You should expect to pay origination points. One "point" is equal to 1% of the total loan amount. If you secure a $200,000 loan with 2 points, you will owe a $4,000 origination fee at closing. These points must be factored into your Cash to Close metric.

Additionally, hard money loans are almost universally interest-only. You do not pay down the principal balance with your monthly payments. You simply service the interest debt until you sell the property (or refinance it) and pay off the entire principal balloon balance at once. Our interest only payment calculator handles this exact math instantly so you know your monthly holding costs.

Ditch the Excel Spreadsheet (And BiggerPockets)

Many investors rely on a clunky hard money loan calculator excel spreadsheet or pay monthly subscription fees for calculators on platforms like BiggerPockets.

We built this free tool to replace those outdated methods. Whether you are running numbers on a quick fix and flip or evaluating a complex BRRRR property, our dynamic engine handles the dual-constraint LTC vs LTV math instantly right in your browser, without the need to download messy spreadsheets or pay for paywalled software.