Residential Rehab Loans

So, you’ve decided you want to rehab and flip a property. Well done!

We’re very happy to help you every step of the way to ensure your investment success. One of the ways we ensure success is by having selective criteria with each of our residential loans. We want you to make a great profit of your deal, so to do that we have a list of standards regarding which types of homes we lend on to eliminate risk factors and decrease the chance of you being stuck rehabbing a terrible property that won’t turn a profit.

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10 Criteria Points for Residential Rehab Loans:

1. The property must be a single family residence.

We lend only on single family residences, rather than funding duplex, 3plex or 4plexes, for a variety of reasons:

  • Plexes add A LOT more expense to their value due to having multiple units.
  • Plexes usually have 2-4 kitchens and 2-4 baths, making them very expensive remodels.
  • Plexes typically don’t get sold to home owners, but to investors, making them more difficult to sell.
  • With a plex, it’s difficult to compare and calculate its property value, since there wouldn’t be many other plexes around to compare.
  • Plexes generally aren’t the best way to make profit. As a result, flex funding requests have been quite rare over the years.

2. The property must be no less than 900 square feet.

We figure the resale profit for you will be MUCH greater if you’re not trying to rehab and flip a closet.

3. The value of the property must be less than 250k.

There are hard money lenders which specialize in funding high-end properties, but we prefer to stay in a more profitable margin. Keeping the funding cap at $250k widens the pool of potential buyers for your property and keeps you from drowning in debt if the house doesn’t sell.

4. The property must not be owner-occupied.

Like many other hard money lenders, we don’t lend on owner-occupied properties (or properties which will be occupied by yourself). This is due to the extra rules and regulations enforced by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Lending on owner-occupied properties increases risk, which we want to steer clear of and protect you from.

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5. The property must not be manufactured, mobile or recreational properties.

•A manufactured home consists of a type of prefabricated housing (usually assembled in factories) transported to sites of use.

Mobile homes are manufactured homes which were built prior to 1976 when the HUD code governing building standards for factory-built homes was instituted.
Recreational properties include agricultural property for farming, lake or river front property with a cabin, ranch land used to raise animals, or country living estates for weekend getaways.

6. The property must be not require more than $75k in repairs.

This criteria goes hand-in-hand with the property value criteria: if you have to sink a large chunk of the loan into repairs, the deal isn’t as good as you thought. We want to keep you invested in good deals, rather than waste endless amounts of time and money pursuing deals which won’t give you at least a $10k return on your investment.

7. The property must not have meth, mold or fire damage.

A property with a history methamphetamine use/manufacture is nearly impossible to rehab. When meth is cooked or consumed in a home, dangerous chemicals are released into the air and saturate walls, ceilings, floors and carpets. Though this contamination can’t be detected by the human eye, exposure to meth byproducts can result in serious injuries to your nervous system. Houses with mold or fire damage are also a major pain to rehab because they require gutting and rebuilding. They typically end up becoming money pits, leaving you with little-to-no return on your investment.

8. The property must not have significant foundation or truss problems.

One of the scariest repairs for any house is a foundation problem. Foundation problems can destroy a house quicker than anything and they end up costing a great deal of money to fix, thereby decreasing your investment return. Just as important as the security of what’s beneath you is the security of what’s above you. Truss problems are not only dangerous, but also end up costing a great deal to fix. Since our goal is to give you as great a return as possible on your investment, we tend to stay away from lending on properties with significant foundation or truss problems.

9. The property must not be located in a rural area.b>

Hard money lenders typically stay away from lending in rural areas because they attract a very limited pool of buyers. There are also no significant properties around to compare, therefore it’s difficult to ascertain the true value of rural properties.

10. The property must not have significant structural changes or add-ons.

Here, we’re talking MAJOR structural deviations from the original blueprints of the home, such as adding walls or levels to the home. These endeavors also end up being money pits, which drastically reduce the return on your investment. We prefer to keep the rehab on the simple side to eliminate potential problems and to make sure you’re getting a larger ROI when all is said and done.

Investor Testimonials:

Lee Staehly – Net Profit $40,000

Jesse Jaynes – Net Profit $50,000

Peter Kuld – Net Profit $14,000

Loan Terms

100% Financing
YES

If your deal is good enough we will cover 100% of the purchase price, rehab, and closing costs, points & interest.

LTV Basis
ARV

Our max loan amount is based on the after repair value, not the current value or purchase price. If the numbers line up, we will fund it.

Maximum LTV
70%

We lend up to 70% of the ARV. We will fund everything but earnest money as long as it fits within 70% of the ARV.

Max Loan Amount
$250K

Our max loan amount is $250,000. For the markets we currently lend in, we’ve found this to be the sweet spot for real estate investing.

Minimum ARV
$70K

Our minimum ARV to lend on a property is $75,000. If it’s less than that there is just not enough profit to make it worth the effort for either party.

Multiple Deals
YES

Yes. We allow you to do 3 deals at a time, enabling you to stay busy and rake in even more profit at a faster pace.

Interest Rate
1.25%/MO

Our interest rates of 1.25 – 1.50% per month fall pretty middle of the road. We are not the cheapest, nor the most expensive, but our 100% financing options allow you to leverage our money.

Origination Points
5.5%

We take on significant risk in offering 100% financing and our points of 5.5% – 6.5% is what keeps us in business.

Max Loan Term
5-MONTHS

The default loan term is set at 5 months, but we do allow up to three 1-month forbearance payments equal to 1.0% of the loan if you need more time.

Monthly Payments
NONE

With no monthly payments during the initial loan term you can focus 100% of your time on rehabbing and selling the property.

Minimum Credit
NONE

None. A bad credit score will affect your points and interest, but because we lend on the property’s after repair value it won’t keep you from getting a loan

Min Cash-to-Close
$0.00

We do not require a down payment on the property. If everything fits in 70% of the ARV you can come to the closing table with $0.00.

Pre-Pay Penalty
NONE

With no pre-payment penalty, fixing and flipping the property in a shorter amount of time can only deepen your pockets.

Required Experience
NONE

Many other lenders either won’t lend to you or will jack up their prices unless you have prior experience, but we’re all making profitable real estate investing accessible to anyone.

Gap Financing
ALLOWED

We allow gap financing in the form of business lines of credit to help with cash-to-close when everything doesn’t fit in 70% of the ARV and we can help you get up to $100,000 in as little as 30 days.

Foreclosure Protection
PROPRIETARY

Nobody else looks out for you like we do. We offer proprietary protection that nearly precludes the possibility of a foreclosure on your records even in the worst-case scenario.

Refinancing Available
AVAILABLE

Yes. With traditional lenders limited to strict loan parameters, we focus on equity over borrower financials. This gives you the liquidity needed for your individual situation.

Full Disclosure
YES

Unlike a lot of other lenders who hide the full cost of the loan until it’s too late… we want you to know what you’re getting into and disclose ALL costs upfront.

Now that you’re educated on the types of residential rehabs for which we can provide funding, there are many exciting options to take advantage of when it comes to your funding and finding the perfect residential rehab deal:

  • REI Starter System: Helps you jump-start into investing with essential tools and software you’ll need to find deals and get funded.

  • Wholesale Professional: Shows all of the different ways to find properties, validate deals and develop a buyers list.

  • Guaranteed 90-Day Finding System: Helps you find profitable properties in 90 days or less while learning valuable finding strategies.

  • REI Professional System: Gives you step-by-step instructions, tools and coaching sessions for maximizing profit in real estate investments.

  • Advanced Deal Analysis: An all-inclusive profit and risk analysis which helps you save time and money in finding the best deals.

  • Evaluation Credit: Consists of at least two evaluations by third-party independent evaluators to assess the value of the property and provide vital information about the investment and profit potential.

  • Guaranteed Finding Starter System: A proven, step-by-step, comprehensive system which teaches how to find and value properties.

  • Partner-with-a-Pro Starter System: Gives you the opportunity to partner with one of our professionals to flip houses with guaranteed no cash to close, and earn a steady profit.

  • Proof of Funds: Helps you get under contract fast with instant credibility.

  • Critical Contracts Portfolio: An all-inclusive compilation of various contracts we’ve acquired over the years to help protect you and your investments.

  • A special collection of all of our checklists reserved only for a select few to guide them towards investment success.