85% LTV Hard Money Fix and Flip Financing In The Oakland Hills

By
Mortgage and Lending with First Capital Trust Deeds dba First Capital Funding, Inc MLO-214130, NMLS-1165726

85 LTV Hard Money Fix and Flip Financing

  
A Bay Area real estate investor acquired this Oakland Hills fixer upper using high-leverage, low upfront cost hard money fix and flip financing from Peer-To-Peer Trust Deeds of Walnut Creek, California.  

There were several factors that led to the borrower's 85% Loan-To-Value (LTV) loan approval: 

  1. Previous house flipping experience (3+ successful flips)
  2. Clean background check 
  3. Liquidity
  4. Purchase price versus AS-IS value of the property
  5. Renovation Budget / Scope of Work
  6. After Repaired Value (ARV) / Resale Value

Despite the personal underwriting requirements (experience, background, and liquidity), this loan was really an equity-based loan.  In this scenario, the lender who made the new first trust deed for $518,500, believed that the AS-IS value was much higher than the $610,000 purchase price.  And that's how we arrived at an 85% LTV loan.  

Fix and Flip Financing Terms:

  • $518,500     Loan Amount (85% LTV)
  • 12.00%        Interest-Only
  • $5,185/mo   Payment
  • 12 Month Term
  • No Prepayment Penalty

By acquiring the property below market value, the borrower was able to use maximum leverage to close the sale.  And with low upfront fees of 1% + $995, the buyer was able to limit their initial cash outlay and use cash on hand for permits and renovations.  

 

Comments (1)

Anonymous
matthew

looking for flip opportunities?
looking to sell a property.
arv: 620k
purchase price: 490k.

Jul 19, 2019 12:13 PM
#1