Rehab loans are a unique type of product that we offer. These are typically short term transactions, and can be considered bridge financing. In California, rehab loans have the ability to give investors the leverage they need to take full advantage of the distressed real estate market.

The general parameters of our hard money rehab loans are bookended by two numbers. The maximum loan amount is figured using an after repair value of 60%. The minimum cash required from the borrower is 20% of the total project cost. So if we have a property being purchased for $200,000 that is worth $300,000 when complete, and there is $20,000 worth of work to be done, our loan amount cap is $180,000. The borrower would need to bring in the medical park pharmacy cash to cover the shortfall, plus cash to cover the rehab costs, prepaid interest and fees. The total cost on this is $220,000 (purchase price plus the cost of rehab), so the minimum cash requirement would be 20% of $220,000, or $44,000.

In this scenario, it is likely that the borrower will need to bring more than 20% cash to the table, as they will need to cover the $20,000 down payment, $20,000 rehab cost, prepaid interest and fees.

A likely breakdown of the numbers for this one would look like this:

Purchase Price $200,000.00
After Repair Value $300,000.00
Rehab Cost $20,000.00
4 Months Interest Reserve $7,500.00
Estimated Loan Related Fees $13,400.00
Estimated Title/Escrow Fees $1,980.00
—————————————————————————–
Loan Amount $180,000.00
Cash Required to Close $62,880.00
Fund Control Available to You to Draw From $20,000.00

No payments for 4 months – if the loan is paid off before this period of time is expired, you would get the unused portion of this back.

A unique feature of the rehab lending we are able to secure is that we will allow you to use equity partner money or gap financing to cover the cash in requirement. In this manner, obtaining a true 100 percent rehab loan pharmacy-online-24hour.com is possible. Finding this gap money or an equity partner, however, can be difficult. If you have a property under contract and are in need of gap financing, please contact us as we may be able to help secure these funds for you as well.

The structure of our rehab loans is pretty straight forward. We include the cost of purchase, the cost of rehab, 4-6 months of prepaid interest and points & fees in our financing equation. The cash required to close should be the only cash out of pocket associated with your project from the time of funding through the time when your interest reserve runs out. No payments from you are needed during this time period, and the rehab funds can be disbursed in advance of the work being done, so there is no need for you to pay for the work then get reimbursed.

The inspection process on this is also very easy. For most projects, we only require pictures of the work being done. If you are able to take video of the property, that is nice as well. Typically we do not require inspections for fund disbursement unless it is a major construction project. The ease of disbursement on these loans is a key ingredient in a successful flip.

Most of our rehab loans are made with a term of twelve months. We never have a prepayment penalty on this product, regardless of the investors on the loan. Typically our rate is 9-12%, which is an interest only payment. The goal, however, is to have the home rehabbed, listed and sold before the first payment is due.

If you are interested in rehabbing properties and are looking for financing, give us a call today at 877 462 3422, or email your scenario. With only basic information, we can give you an idea of how we
can help. The basic upfront information we would need is:

Purchase price
Address
SQFT/bed/bath count
Pictures (or a link to the listing with pictures)
Estimate of rehab cost and/or breakdown of rehab

With these items we can put together a preliminary approval usually within 24 business hours.

We are located in California and can help with your hard money loan request.  We do not finance consumer purpose loans, all of our loan programs are for business purpose only.