Hard Money Loan Calculator (Fix & Flip)
Points, interest-only carry, and balloon on a fix-and-flip hard money loan, plus total financing cost, cash needed in, and projected project profit. Free.
Hard Money Loan Calculator
Hard money loans are short-term, asset-based loans used by fix-and-flip investors: high rates, upfront points, interest-only payments, and a balloon when you sell. Enter the loan and project numbers to see your true financing cost and whether the flip actually profits after it.
How to Use the Hard Money Loan Calculator
Enter the loan terms
Enter the loan amount, the points charged up front (one point is 1% of the loan, as the CFPB defines it), the annual interest rate and the term in months. Take all four from the lender's term sheet: rates and points vary from lender to lender and deal to deal.
Add the project numbers
Your purchase price, rehab budget, expected after-repair value (ARV / sale price), and selling costs (agent commissions, closing, staging) as a percentage of the sale.
Read the financing cost
Points plus interest-only carry over the term is the cost of the money. On the defaults (USD 225,000, 2 points, 11%, 9 months) that is USD 4,500 + USD 18,563 = USD 23,063, about 13.7% of the loan a year. Because the loan is interest-only, every extra month adds another USD 2,063, so model a longer term than you hope for.
Check the profit and cash in
Profit is sale price minus selling costs, purchase, rehab and financing. Cash needed is the part of purchase and rehab the loan does not cover, plus points and interest. On the defaults that is USD 31,388 of profit on USD 83,063 of cash, about 38%.
Hard Money — Expensive, Fast, and Built for Flips
Why Flippers Pay So Much for Money
Hard money is short-term financing secured by the property itself rather than by your income or credit. Private lenders and funds make these loans to real-estate investors — overwhelmingly fix-and-flippers and BRRRR investors — and they price for speed and risk. Expect upfront points, an interest rate well above a conventional mortgage and a term measured in months, usually with interest-only payments and the full principal due as a balloon when you sell or refinance. The exact terms vary by lender and deal, so take them from the term sheet. Why would anyone pay that? Because hard money can close in days, not the weeks a bank takes; because it will fund a distressed property a conventional lender won't touch; and because it sizes off the after-repair value, letting an investor control a project with less of their own cash. For a flip that turns in a few months, the high rate applies for only a short window, so the dollar cost can be acceptable even at eye-watering APRs.
The number that kills flips is not the interest rate — it's time and the ARV estimate. Because the loan is interest-only and short, every extra month on the market adds carry directly to your cost, and a rehab that runs long or a sale that stalls quickly erodes a thin margin. Equally, the whole deal rests on the after-repair value being real: overestimate the ARV and the profit this calculator shows evaporates at the closing table. Seasoned flippers underwrite conservatively — they assume the project takes longer than planned, budget a contingency on top of the rehab, and use the "70% rule" as a sanity check (pay no more than 70% of ARV minus rehab costs). Run this calculator with a pessimistic ARV and a longer-than-hoped term; if it still profits, the deal has margin.
"On a flip, hard money's interest rate is rarely what hurts you — time is. Every month the property doesn't sell adds carry to a fixed budget, so the deals that fail are the ones underwritten with no slack."
When Hard Money Makes Sense — and the ASEAN Context
Hard money earns its cost when speed or property condition rules out a bank, and when the projected margin is wide enough to absorb the points and carry with room to spare. It's a poor fit for buy-and-hold investors who could use cheaper conventional financing, or for any deal whose profit only works if everything goes perfectly. The professional approach is to treat hard money as a bridge: buy and renovate with it fast, then either sell (a flip) or refinance into a long-term mortgage (the "R" in BRRRR) to pay off the expensive short-term loan. For investors in Singapore and Malaysia, dedicated "hard money" lending is far less common — property financing is dominated by banks under tight MAS and Bank Negara lending rules, and short-term bridging loans exist but are more regulated and conservative. The underwriting discipline still travels: whatever the funding source, a flip only works if the renovated value is realistic, the timeline has slack, and the total cost of money plus selling costs leaves a genuine margin.
Points, interest-only carry and the balloon: what a 9-month USD 225,000 loan costs
Hard money is short-term financing secured by the property rather than by your income.
One point is 1% of the loan (CFPB): 2 points on USD 225,000 is USD 4,500 at closing.
Interest-only: each month costs loan × rate ÷ 12, USD 2,063 on the defaults, and the balance does not fall.
Financing cost = points + interest: USD 23,063 over 9 months on the defaults, about 13.7% of the loan a year.
A balloon payment is a large one-time payment at the end of the term (CFPB); here it is the whole loan.
The CFPB warns you may not be able to refinance a balloon if the property's value or your finances fall.
Time is the cost driver: each extra month on the market adds a full month of interest to a fixed budget.
On the defaults, profit is USD 31,388 on USD 83,063 of cash put in, about 38%.
The 70% rule is a flipper's rule of thumb: pay at most 70% of ARV minus rehab, USD 210,500 at the defaults.
Other holding costs (tax, insurance, utilities) are not modelled; add them to the rehab budget.
Frequently Asked Questions
- A short-term loan secured by real estate rather than your income or credit, made by private lenders or funds to real-estate investors. It carries high rates and upfront points, has a short term measured in months, and is usually interest-only with the principal due as a balloon when you sell or refinance. It's designed for fix-and-flip projects where speed and the property's potential value matter more than the borrower's financials.
- One point is 1% of the loan amount, as the CFPB defines it, so 2 points on USD 225,000 is USD 4,500, paid at closing. Hard-money lenders charge points on top of the interest rate. Include them when comparing offers: on a short loan, points are a large share of the total cost, which is why this calculator also shows the cost as a yearly rate on the loan.
- Hard money prices for speed and risk. Lenders fund distressed properties banks won't, close in days, and base the loan on after-repair value — all riskier than conventional lending. Because the loan is short-term, though, the high annual rate applies for only a few months, so the actual dollar cost on a quick flip can be reasonable. The calculator shows that dollar cost (points + carry) rather than just the APR.
- A flipper's margin-of-safety guideline: don't pay more than 70% of the after-repair value (ARV) minus your rehab costs. On a USD 365,000 ARV with USD 45,000 of rehab, that's (0.70 × 365,000) − 45,000 ≈ USD 210,000 maximum purchase. The 30% buffer is meant to cover financing, selling costs, holding costs, and profit. It's a quick screen, not a substitute for running the full numbers as this calculator does.
- Time and an overestimated ARV. Because the loan is interest-only and short, every extra month on the market adds carry directly to your cost on a fixed budget, and a rehab that runs long compounds it. Equally, if the after-repair value turns out lower than projected, your profit shrinks or disappears at sale. Underwrite both pessimistically — assume a longer hold and a conservative ARV, and only proceed if the deal still profits.
- Less than buying outright, but not zero. The loan usually covers a large share of purchase and sometimes rehab, but you fund the gap (purchase + rehab − loan), the points at closing, and the interest carry during the project. The calculator's "cash needed in" combines these. Many lenders also require you to have reserves, and some fund rehab via draws as work is completed rather than all upfront.
- This calculator models the financing (points + interest) and the transaction (purchase, rehab, selling costs). It doesn't separately itemise other holding costs — property taxes, insurance, utilities, and permits during the rehab — which can add several thousand dollars. For a precise net, add those to your rehab budget or subtract them from the profit shown. They're another reason to keep the projected margin comfortably positive.
- Use hard money when you need to close fast or the property's condition rules out a bank, and the margin is wide enough to absorb the cost. Use conventional financing for buy-and-hold properties in good condition, where its far lower rate wins. A common pattern is to buy and renovate with hard money, then refinance into a conventional loan once the property qualifies — the BRRRR strategy — paying off the expensive short-term loan with cheaper long-term debt.
- The CFPB defines a balloon payment as a large, one-time payment at the end of the loan term. Because this loan is interest-only, the whole balance is the balloon, normally repaid from the sale or a refinance. The CFPB warns that if the property's value or your finances fall you may not be able to refinance, so have a second way out before you borrow.
- Dedicated hard-money lending is far less common than in the US. Property financing in both countries is dominated by banks operating under tight MAS (Singapore) and Bank Negara (Malaysia) lending rules, and short-term bridging loans exist but are more regulated and conservative. The fix-and-flip model itself is less prevalent given stamp duties, seller's stamp duty, and holding rules that penalise quick resale. The underwriting discipline still applies wherever you invest — realistic resale value, slack in the timeline, and a real margin after all costs.
Method & sources
How it computes
Points = loan x points%; interest-only carry = loan x rate / 12 x months; financing = points + interest (also shown as a yearly rate on the loan); cash in = max(0, purchase + rehab - loan) + points + interest; profit = sale - selling - purchase - rehab - financing. RecaProperty.hardMoney, tested.
What this tool implements
- Arithmetic unchanged and now tested. Points per the CFPB (one point = 1% of the loan); balloon per the CFPB (large one-time payment at the end of the term, and refinancing may not be possible if value or finances fall).
- Worked figures from the page's defaults: $23,063 of financing on $225,000 over 9 months (~13.7% a year), $31,388 profit on $83,063 cash, 70% rule maximum $210,500.
- Removed as unsourced: typical rate (9-14%), points (1-4%) and term (6-18 months) ranges, now 'take them from the term sheet'.
Sources
- Consumer Financial Protection Bureau. What is a balloon payment? When is one allowed? https://www.consumerfinance.gov/ask-cfpb/what-is-a-balloon-paymen…
- Consumer Financial Protection Bureau. What are discount points and lender credits and how do they work? (one point equals 1% of the loan amount). https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points…
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