A lot of our business is related to California hard money rehab loans or construction completion loans. We have a number of programs for real estate investors who want to fix and flip or complete and sell projects. We even have ground up products that can help finance anything from single spec homes to larger developments. The newest product we are able to offer for these real estate investors is experience based with regards to pricing, with a maximum loan to value of 80% of the ARV or as complete value.
These hard money loans can go as high as 80% of either the acquisition price or the as is value, whichever is less, on the initial funding, plus as high as 80% of the as complete or after repair value for the fund control account. This is pretty aggressive, but when you factor in the experience based pricing it can get even more so as the pricing can fluctuate by 5% or more between investors with no experience and those with the most experience.
In addition, for investors that do not need the most aggressive funding possible, rates get much better at lower loan to value ratios. For example, the most experienced investor only needing 70% of acquisition cost plus 70% of as complete value for the fund control could easily be in the single digit rates. Even investors with moderate experience will find very aggressive rates on this new product!
As an example transaction we will look at a purchase price of $500,000, as is value of $500,000, rehab costs of $200,000 and an as complete value of $900,000. In this scenario at the 80% level the initial funding would be $400,000, so $100,000 plus closing costs would be required to close. With the as complete value of $900,000 and 80% as our lending basis, the fund control account could be funded up to a total amount of $320,000 ($900k * 80% = $720k - $400k loan amount = $320k max fund control). This budget only calls for $200,000, so the full amount of the fund control could be funded. The total loan amount would be $600,000 and there would be $200,000 in a fund control account to be drawn on as work is completed.
For more information on this product please give us a call at 877 462 3422 or send an email to me directly with the details of your scenario. Usually we can discuss your project and let you know in the first 10 minutes how we can likely help you obtain the financing required.
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