Hard Money Lending
A Hard Money Loan is defined as a
short term loan for an investor to purchase a property when do
they do not already have a qualified buyer under contract at
the time they buy the house. Perhaps the intent is to rehab
the house and flip it for full retail price. Or perhaps you
find a great deal and don't want to wait to find a buyer for
fear of losing the house to another investor. Another common
scenario is that you have a buyer lined up, but their
financing is in the early stages so they are not fully
approved yet at the time you close on the house. The key
element is that when you buy it, you have no buyer under
contract who is qualified to buy the house and their is
uncertainty with your B to C Transaction.
Like
Transactional Funding Deals, Hard Money Deals have two
parts:
A > B Transaction:
Investor Buys House from Seller
B > C Transaction: Investor Sells
House to New Buyer
Cost Relative to
Risk
Since there is no end buyer waiting to buy the real
estate investment, these types of deals are inherently
riskier. As a result, there is a slightly higher interest rate
charged. In addition, we have a more stringent approval
process. See the bullet points below for what we require on
hard money deals.
NOTE: We are
currently only providing Hard Money Loans in the metropolitan
St. Louis area, both on the Missouri and Illinois side.
- The form completed at http://www.REIFunding.com/request-funding.htm
- The contract between the Seller and the Buyer (the A-B
transaction)
- The contract between the Buyer and the End Buyer (the
B-C transaction)
- If you are buying in a Trust: the Agreement and
Declaration of the Trust, the Appointment of Trustee,
Assignment of Beneficial Interest, the Affidavit of Trust,
and the Deed to Trustee
- Short Sale Approval letters from all lenders, or HUD/REO
Acceptance letter (if applicable)
- State paperwork verifying your LLC, corporation, or
registered business of B Buyer
- Scanned copy of a photo ID with signature of all signers
on both the B and C transactions
- The contact name, phone, & email address for the C
Buyer’s lender to verify knowledge of the flip or proof of
funds if it is a cash purchase
- The contract for the Assignment of Beneficial Interest
(if applicable)
- The Loan to Value must be 65% - 75% or better or sufficient to
cover fees and interest that will be incurred. If the loan
is under $50,000, the LTV may decrease at Capri Capital's
discretion.
- A Home Inspection Report ordered by Capri Capital and
paid for by your company
- An Appraisal ordered by Capri Capital and paid for by
your company. Must appraise at buyer's price or intended sales price.
- Insurance Binder showing Capri Capital as additional
Insured/Endorsed
- If applicable, the contact name, phone number, and email
address for the B-C Title Company.
- You must provide a summary of your investor history,
including property addresses and dates of purchases and
sales.
- You must participate in a background check, which
includes credit history and criminal check in all states. A
minimum credit score of 700 is preferred. The cost is $35.
- A Scope of Work detailing all planned renovations. The
SOW must include the amount of funds necessary to complete
the work. Renovation funds are not provided by REI Funding;
we only provide funding for the purchase price and closing
costs.
- The funds for renovation must be placed in escrow. These
funds will be disbursed upon set points of
accomplished renovation.
- Additional requirements may apply, as determined by REI
Funding
Contact us for more
info
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