Resources
Plain-English guides, tools, and templates to help you understand short-term private money lending and put together a strong loan request.
Loan Cost Calculator
See what a short-term, interest-only loan really costs. Enter your own numbers to understand the monthly payment, the upfront points, and the total cost of the money.
For illustration only. The examples shown are not a quote or an offer. Actual pricing is quoted deal by deal and is subject to underwriting and approval. “Effective annual cost” spreads interest, points, and fees over the time you hold the loan.
How a Loan Closes, Step by Step
From first request to funded loan, here is what to expect.
- Submit your requestTell us about the property, the purchase price and after-repair value, your plan, and how you intend to repay the loan.
- Review and termsWe review the property and the transaction directly and respond with clear terms.
- Accept terms and provide documentsYou send what we need to underwrite the loan, such as the purchase contract, entity documents if you borrow through an LLC, and proof of insurance.
- Title and escrowWe work directly with your title company or escrow agent. Title is reviewed and a first-position lien is prepared on the property.
- Closing and fundingLoan documents are signed and funds are wired to your title company or escrow agent, typically within 24–48 hours of approval once title and documents are in order.
- Monthly interest and payoffYou make monthly interest payments. The principal is repaid at maturity, usually from a sale or a refinance.
Most delays come from title issues or missing documents, so lining those up early speeds everything up.
What to Have Ready
This is what lenders commonly ask for. Having it ready makes your request faster to review. We will tell you exactly what we need for your deal.
About the deal
- Purchase contract, or proof of ownership for a refinance
- Property address and property type
- Purchase price and after-repair value, with recent comparable sales
- Scope of work and rehab budget
- Your project timeline
- Your plan to repay the loan (sale, refinance, or other)
About you and the closing
- Entity documents, if borrowing through an LLC
- Government-issued ID for the borrower or signer
- Summary of your real estate experience
- Funds for your down payment and closing costs
- Hazard insurance quote or policy
- Your title company or escrow agent’s contact information
Exit Strategies
Short-term loans are repaid at maturity, so lenders want to see a realistic plan for how that happens. The most common ones:
Sell the property
The classic fix-and-flip. Your plan rests on a realistic after-repair value, solid comparable sales, and a believable time to sell.
Refinance
Pay off the short-term loan with a longer-term loan, often to keep the property as a rental. You will want to know in advance what the long-term lender requires.
Business income or other assets
Repay from cash flow, the sale of another property, or other funds. Be ready to show that the money will be there.
What makes an exit plan strong
- A conservative value and timeline
- A backup plan if the first one slips
- A clear source for the monthly interest payments
Common Mistakes to Avoid
- Underestimating rehab costs and time. Build in a contingency, often 10% or more, for surprises.
- Overestimating the after-repair value. Base it on recently sold comparable properties, not asking prices.
- Finding title problems late. Open liens, easements, and probate issues can delay or stop a closing. Start the title search early.
- No plan for the monthly interest. Interest-only payments come due every month, whether or not the project is finished.
- Skipping permits. Unpermitted work can create trouble at sale or refinance.
- Forgetting holding and selling costs. Taxes, insurance, utilities, and commissions all reduce profit.
- Comparing rates only. Points and fees matter. Compare total cost, and use the calculator above.
- Waiting to line up insurance and title. Both are needed to close, so arrange them early.
Glossary
The terms you will run into when borrowing short-term money for real estate.
- After-repair value (ARV)
- What the property is expected to be worth once the planned work is finished.
- Bridge loan
- Short-term financing that “bridges” the gap until a sale, refinance, or other long-term funding.
- Collateral
- The asset that secures the loan. Here, it is the real estate.
- Comps
- Recently sold, similar properties used to estimate value.
- Escrow
- A neutral third party that holds funds and documents until closing conditions are met.
- Exit strategy
- How the loan will be repaid, such as a sale or a refinance.
- First-position lien
- A lender’s claim on the property that ranks ahead of other liens if the loan is not repaid.
- Holding costs
- The costs of owning the property while you work on it: taxes, insurance, utilities, and interest.
- Interest-only loan
- You pay only interest each month. The full principal is repaid at the end.
- Loan-to-cost (LTC)
- The loan amount divided by the purchase price plus rehab costs.
- Loan-to-value (LTV)
- The loan amount divided by the property’s value.
- Maturity
- The date the loan must be repaid in full.
- Origination points
- A one-time fee, stated as a percent of the loan. One point is 1%.
- Payoff
- The amount needed to repay the loan in full, including any interest owed.
- Principal
- The amount borrowed, not counting interest or fees.
- Purchase-money loan
- A loan used to buy a property.
- Rehab (renovation) loan
- A loan used to fund repairs and improvements.
- Title commitment
- The title company’s statement of the property’s ownership and any liens, and what must be cleared before closing.
- Underwriting
- The lender’s review of the property, the deal, and the borrower to decide whether to lend.
Free Templates
Simple spreadsheets that work in Excel or Google Sheets. Fill in the yellow cells and everything else calculates.
Deal Analysis Worksheet
Enter the purchase price, rehab budget, ARV, and loan terms. See loan-to-value, financing costs, estimated cash needed, and estimated profit.
Download (Excel)Rehab Budget & Scope of Work
List each repair by category, add costs, and track estimates against actual spending, with a contingency built in.
Download (Excel)Ready to move forward?
Tell us about your property and your deal. We respond promptly with clear terms.
Request a LoanThis page is for general education only and is not legal, tax, or financial advice. Examples and templates are illustrations, not quotes. All loans are subject to underwriting and approval, and nothing here is a commitment to lend.