Yes, you can use any title company. However, it is important to make sure the title company you use is familiar with this type of commercial loan product. They are required to prepare the warranty deed and provide clear title including a survey endorsement indicating property is free of encroachments. Also, title company will need to be approved by investor.
Products require a guaranty from at least one qualifying individual guarantor that directly or indirectly has an ownership interest greater than or equal to 20%. A qualifying individual guarantor is an individual/entity that provides sufficient financial and industry experience support for the subject loan or line of credit. Experience, FICO scores, liquidity and other review factors from non-guarantors (regardless of company ownership) will not be used in measuring guarantor credit minimums.
••Background Check: Required for all borrowers, guarantors or owners or individuals with managing control or ≥ 20% direct/indirect interest.
••Credit Check: Required for all guarantors and members with ≥ 20% direct/indirect interest.
••OFAC Check: All members, owners and managers of the entity
At this time, we lend to us citizens, permanent residents aliens, non-permanent resident aliens that reside in the US and foreign nationals from eligible countries.
Yes, you can! You can do partial renovations as well as from foundation up. You can use this product to bring a home up to code after a natural disaster such as raising elevation after a flood or using fire resistant materials in a fire prone area.
Yes you can. Any accounts that have a tax penalty for early withdrawal can be used to qualify for your line of credit. However, we will only consider 70% of those funds. You are not required to access those funds for the product.
No. Our investor requires that at least one member of the LLC to have prior home ownership experience.
All guarantors are required to be at least 21 years of age.
Yes, revocable trust and community land trusts are eligible however will require full trust review.
Yes. Manufactured and mobile homes, co-ops, property greater than 20 acres, working farms, bed and breakfasts, boarding houses, log homes, owner occupied houses, condo-tels.
No, these products are for long term rentals only.
The investor makes best efforts to process and advance rehab proceeds within five business days of receiving the Draw Request. Draw proceeds are disbursed upon completion of the work phases and subsequent inspection of the property. Draw proceeds will be disbursed based on the percentage of work completed compared to total budget.
Yes, you can access this product once you have settled out of the bankruptcy or settlement of foreclosure for at least 2 years.
Yes, you can get a mixed-use property provided that at least 75% is designated as residential use.
The line is established for a period of 1 year. On your anniversary the investor will require requalification of the LLC and all it’s members. You will re-supply with current asset information and the amount of the line will be adjusted accordingly. At line can be increased after 3 months and utilization of over 50% of the credit line provided additional assets can be supplied.
You would connect with your contractor to prepare an accurate and detailed budget. Then you would contact us and provide the property application, fully executed purchase contract, completed budget and provide payment for appraisal and inspection.
Interest accrues from settlement date based on the applicable interest accrual type (either Full Accrual or Balance Accrual.) All interest is payable monthly and due on the first of the month.
••Full Accrual: Interest accrues based on the full loan amount, regardless of outstanding principal and disbursements. Funds that are not disbursed at close will be held as an escrow holdback for future renovation draws.
••Balance Accrual: Interest accrues based on the balance outstanding, including initial disbursement and the amounts of subsequent disbursements.
We typically seek to do business with experienced rehab investors, landlords and developers.
Investment experience generally consists of retained projects (rentals) and resale projects (flips) from the past two years. Experience outside of two years may be averaged to determine the average number of transactions completed per year. Experience outside of five years will be evaluated on a case-by-case basis. Additionally, for single loan qualifying criteria, the investor will consider real estate industry experience including, but not limited to, experience as a Real Estate Agent/Broker, Appraiser, Property Manager, Real Estate Investor, Inspector, Developer, and/or Builder for its Tier 2 product.
To validate that the borrower submitted budget properly considers repairs, including contingencies, that support the prospective value of the repaired house. This budget is given to the appraiser to factor into the after-repair value (ARV) calculation, which drives loan limits.
Property valuation include an “As-Is” value and an “After-Repair” value, if applicable, to determine maximum initial advance and repair/rehab holdback, if applicable.
Yes, all loans require ACH authorization at close. Given the shorter duration of the loans (typically less than one year) and the changes in monthly interest payments, ACH provides for an automated and accurate payment method.
Company reviews a borrower’s construction/rehab budget and qualifying budget eligible for financing. This budget amount is held back as an escrow holdback. The borrower can request these escrowed rehab funds using the Draw Request Form after portions of the rehab are completed.
A borrower who has been approved for the Line of Credit product completes the Draw Request Form. The borrower must provide contact information for property access and include bank wire instructions for draw/advance proceeds. An inspection order is placed with Granite (national inspection company) and sends an email confirmation back to the borrower. Within 24 hours of receiving the order, the inspector contacts the borrower directly to coordinate a date/time for the property inspection. Report is typically received within two business days, and a copy is provided to the borrower. Depending on the percentage of the project that has been completed, funds will be released of that same percentage of funds from the rehab escrow holdback, minus a draw fee of $145.00.
An appraisal for an investment property may have additional scope, compared to a traditional owner-occupant appraisal. This is similar to how appraisal requirements may vary between FHA and VA appraisals. Investment properties often have a complex or distressed vesting past with large variations in value, conditions, owners and general comparability. These fluctuations make it more complicated for appraisers to evaluate appropriate comparable properties in a market and create atypical property characteristics.
For example, if an appraiser is appraising a duplex, the most comparable properties are similar duplexes. However, if the subject property is in an area with limited or stale comparable duplex sales, this may limit available and comparable data needed for the appraiser to make an easy assessment.
Since loan amounts and interest rates are driven by cash flow, there are multiple pieces of information collected during the due diligence period that impact loan terms. These include validation of appraised values and rents, verification of insurance coverage, and title work. Therefore, we can not lock the rate earlier in the process.