Hard-money analysis: construct the financed balance first
The model begins with property price less down payment. It then handles the entered origination fee according to the selected treatment: financing increases principal, while paying at closing leaves principal unchanged but raises initial cash. Other upfront fees remain visible rather than disappearing into a generic percentage. This ordering matters because interest-only and amortizing payments must use the same financed balance for a fair structural comparison. It also prevents an apparent low payment from concealing a large cash requirement before the project begins.
Hard-money analysis: compare P&I with interest-only on equal terms
The amortizing path applies the entered monthly rate and amortization term, paying interest first and reducing principal with the remainder. The interest-only path covers modeled interest and carries principal unchanged to the balloon date. Use the Interest Only Loan Calculator for a consumer-style phase transition, the Amortization Calculator for a full installment ledger, and the APR Calculator only for a separately labeled entered-fee cost scenario. Regulation Z § 1026.22 is cited for consumer-credit APR comparison mechanics; this article does not claim that provision governs a commercial hard-money transaction. None supplies a commercial offer.
Hard-money analysis: trace balloon balance into projected LTV
At the selected balloon month, remaining principal becomes the modeled payoff balance. The property-value scenario compounds the entered annual appreciation rate over the same fractional term. Equity subtracts the chosen loan balance from that hypothetical value; refinance loan-to-value divides balance by value. These outputs are linked assumptions, not independent facts. A lower realized sale price or appraisal simultaneously reduces equity and raises LTV. Add selling costs, taxes, construction overruns, extension charges, and payoff fees outside this clean path before judging an exit.
Hard-money analysis: reproduce the reviewed $2 million example
The reviewed starting case uses a $2,000,000 property, $400,000 down payment, 2% origination fee paid at closing, 10% annual interest, 30-year amortization, an 18-month balloon, and 6% annual appreciation. It produces a $13,333.33 interest-only payment, a $14,041.15 amortizing payment, and an amortizing balloon near $1,586,315.54. Those values preserve the existing tool's audited facts. Changing fee treatment or balloon timing should change the ledger, so save inputs with every result.
Hard-money analysis: treat the exit as a risk case, not a promise
Commercial-property underwriting and state lending rules vary. The OCC's handbook frames acquisition, development, construction, and income-producing real estate as distinct risk contexts; this calculator does not perform that underwriting. It excludes draws, interest reserves, lien priority, inspection funding, recourse, environmental review, lease rollover, and covenant testing. Model a flat-value and lower-value case, identify who can extend maturity and at what cost, and obtain legal review of the actual documents. The page is independent of any lender and provides no approval or investment recommendation.