fix-and-flip-rehab-loan

Fix-n-Flip or Rehab Loans

Up to 65% of current fair market value

  1. 2.0 – 2.5 points on most 6-18-month loans
  2. From 10.00% interest depending on LTV
  3. Rehab portion of loan held in Fund Control and released on draws.
  4. Deferred payment plans and prepay paid interest loans may be possible 
  5. Interest is paid only on drawn amount of loan
  6. No prepayment penalty, extensions available
refinance

Refinances

Up to 50% of current fair market value

  1. 2.0 – 3.5 points on most 6-18-month loans
  2. From 10% interest depending on LTV
  3. Cash Out Refi Loan will require a Use of Funds letter
  4. Cash Out needs to be used towards business purposes
  5. No prepayment Penalty, extensions available.
probate-loans

Probate, Trust, Estate Loans

Up to 65% of current fair market value

  1. 2.0 – 2.5 points on most 6-18-month loans
  2. From 10.00% interest depending on LTV
  3. Utilize for property tax reassessment benefits
  4. Fund settlements & real estate buyouts
  5. Payoff attorney fees, mortgages, delinquent taxes & other liens/expenses
  6. No prepayment penalty, extensions available

What is a Hard Money Loan?

By definition, a hard money loan is a very specific type of loan. Hard Money revolves around asset-based loan financing. The borrower receives funds secured by the value of their real estate. Hard money loans will typically be issued under private investors or companies (such as ourselves), as opposed to banks. Because of this, the interest rates of hard money will generally be higher than more conventional commercial or residential property loans. That is because the risk is higher than conventional real estate loans.

Most hard money loans are used for short-term projects. They typically last from a few months to no more than a couple years. The criteria reviewed when considering a good candidate for a hard money loan varies largely by the lenders. However, most hard money lenders primarily qualify this type of loan based on the value of the real estate being secured.  The value of the property is the primary guideline for loan evaluation.

Why use Hard Money Loans?

Hard money loans may be sought by property flippers who plan to renovate and resell the real estate. The higher cost of a hard money loan is offset by the fact that the borrower intends to pay off the loan relatively quickly.

The main reason is the ability of the hard money lender to fund the loan quickly. In most situations, hard money loans can be funded within a week. Compare that to the 30 – 45 days it takes to get a bank loan funded.

The ability to obtain funding at a much faster rate than a bank loan is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing. A borrower may choose to use a hard money loan if they have been rejected by the banks for income that cannot be verified, foreclosures, or credit issues. Hard money lenders are able to look past these issues as long the loan be repaid, and the borrower has enough equity invested in the property.