FAQs

We offer several short-term, asset-based financing options for real estate investment.

1. Fix and Flip Loans: These loans are used by real estate investors to purchase and renovate a property with the goal of reselling it for a profit. They are typically short-term loans with high interest rates.
2. Bridge Loans: These loans are used to provide temporary financing for a property while the borrower secures permanent financing. They are also short-term loans with high interest rates.
3. Refinance Loans: These loans are used to refinance an existing mortgage on a property. They may be short-term or long-term loans and the interest rates can vary.
4. Transactional Funding: These loans are typically used in “wholesaling” transactions, where the investor enters into a purchase contract with the seller and then assigns the contract to a cash buyer, usually at a higher price.

An asset-based loan for real estate investing is a type of loan that is secured by the property being purchased or by other assets, such as a portfolio of properties. The loan is typically provided by a lender, such as a bank or private lender, and the loan amount is based on the value of the assets being used as collateral. Asset-based loans are often used by real estate investors to purchase properties that they plan to renovate or improve in order to increase the value of the property and eventually refinance the loan or sell the property at a profit.

A fix and flip loan, also known as a “rehab loan,” is a type of loan used by real estate investors to purchase and renovate a property with the goal of reselling it for a profit. These loans are typically short-term loans, with terms ranging from 6 months to a year, and are often used by investors who are looking to quickly purchase, renovate, and resell a property.

A bridge loan is a type of short-term loan that is used to bridge the gap between the purchase of a new property and the sale of an existing property. These loans are typically used by individuals or businesses to purchase a new property before they have sold their current property, allowing them to move into the new property before they have to move out of the old one. The loan is typically secured by the existing property and is usually paid back when the existing property is sold. The interest rates on bridge loans are typically higher than on traditional mortgages.

Examples: Mortgage Payoff and Second Mortgage

Cash-out refinancing is a type of refinancing in which a homeowner obtains a new mortgage that is larger than the current outstanding mortgage, and then takes the difference between the two loans in cash. This is a way for a homeowner to access the equity they have built up in their home or investment property and use it for other investments.

Transactional funding, also known as “flip funding” or “gap funding,” is a type of short-term loan that is used by real estate investors and wholesalers to purchase and resale an investment property quickly. These are usually same-day, or “double close” transactions.

Examples: Non-Assignable Contracts, Transaction Credibility, and Non-Disclosure of Assignment Fees

ARV stands for “After Repair Value.” It is an estimate of the market value of a property after any necessary repairs or renovations have been completed. It is an important factor that is considered by hard money lenders when determining the loan-to-value (LTV) ratio and the amount of money we are willing to lend to a borrower.

When a real estate investor is looking to purchase a fix-and-flip property, they will typically calculate the ARV to determine the potential profits from the project. The ARV is calculated by taking the estimated market value of the property after the repairs are completed and subtracting the cost of the repairs and renovations, as well as any other costs associated with the project, such as closing costs, real estate commissions, and financing costs.

For example, if an investor purchases a property for $100,000 and plans to spend $30,000 on repairs and renovations, and their estimated ARV is $200,000, the investor’s potential profit is $70,000.

It’s important to note that the ARV is an estimate and not a guarantee, and it is based on various factors such as the property location, condition, and the real estate market conditions. Therefore, it’s always a good idea to consult with a real estate professional or an appraiser to get a more accurate estimate of the property’s value after repairs.

LTV stands for “Loan-to-Value.” It is a ratio that compares the amount of the loan to the value of the property that is being used as collateral.

The LTV ratio is calculated by dividing the loan amount by the value of the property. For example, if a property is worth $100,000 and the loan amount is $70,000, the LTV ratio is 70%.

The LTV ratio can vary based on the type of property, the location, and the borrower’s creditworthiness and financial situation. Typically, our LTV ratio is between 50% and 75%, but can vary depending on several factors.

It’s important to note that the LTV ratio is based on the estimated value of the property, which is known as the After Repair Value (ARV), and it’s an estimate, not a guarantee. Therefore, it’s always a good idea to consult with a real estate professional or an appraiser to get a more accurate estimate of the property’s value before applying for a loan.

APR stands for “Annual Percentage Rate.” It is a measure of the cost of credit, including the interest rate and any additional fees or charges, expressed as a percentage of the loan amount.

The APR takes into account not only the interest rate on a loan, but also any additional fees or charges that may be associated with the loan, such as origination fees, closing costs, and points. By including these additional costs, the APR provides a more accurate picture of the total cost of the loan.

We provide funding for several types of residential and properties.

1. Single-Family
2. Townhouses
3. Condominiums
4. Multi-Family

Typically, we lend between 50% and 75% LTV.

The LTV is based on a percentage of the property’s value, known as the loan-to-value (LTV) ratio. This means that if a property is worth $100,000, a lender with a 70% LTV ratio would lend you up to $70,000.

The amount that we lend for an investment can vary widely depending on the loan terms, the property being financed, and your creditworthiness and financial situation.

We offer competitive rates for all of our loan products.

Typically, we offer between 12-15%.

Rates can vary based on a borrower’s experience and track record as a real estate investor, current market conditions, the loan term, the loan-to-value ratio (LTV), and the value or condition of the property.

Points, also known as origination points, are a type of fee charged by the lender to cover the costs of originating, underwriting, and processing the loan. They are expressed as a percentage of the loan amount and are typically added to the loan balance.

Each point is equal to 1% of the loan amount, so if a loan is for $100,000 and the lender charges 2 points, the points would be $2,000.

The points are usually paid at closing, along with other closing costs such as appraisal fees, title fees, and other miscellaneous costs.

Most of our short-term loans are for a period of 6-12 months.

Longer terms are available when required for larger projects.

The property being financed is used as collateral for the loan.

We evaluate the After Repair Value (ARV) of every property to ensure that it has enough value to cover the loan.

The approval process can take anywhere from a few days to a few weeks. However, we are able to approve and fund a loan in as little as 24 hours when necessary.

The process for getting approved is typically quicker than the traditional mortgage process because we are more focused on the value of the property being used as collateral, rather than the borrower’s credit score or income.

It’s also important to note that the loan application process may take longer if the borrower has a complex financial situation or if there are issues with the property that need to be addressed.

No, we do not pull your credit for short-term, asset-based loans.

Yes.
We will hold the repair amount in escrow and release it as repairs are needed.
When you require funds, you will request an escrow draw (see more info below).

After the borrower submits an escrow draw request our team will review it and funding should be released within 48 hours.
Please Note: Documentation of the work to be completed, or already completed, should be submitted to our team with an escrow draw request.

No. Our lending is based on loan-to-value, not loan-to-cost ratios. This allows you to be able to finance the house 100% if you have been able to negotiate the purchase price low enough.

It depends on your loan amount. At minimum, you will have to bring the points plus closing costs to closing.