Contractor/Borrower needed loan term flexibility to decide on his exit strategy. MVI came through with an extra year.
- $382,000 1st Trust Deed
- 55% LTV on After Repair Value
- 8.50% Lender Rate
- 24-month Loan Term
- 6 month’s Guaranteed Interest
- Funds Control
This Escondido property was about to hit the market when the borrower and family member seller came to an agreement on the sale price of the home and two separate parcels. The borrower was an experienced general contractor – his wife, an experienced real estate agent. Together they saw an opportunity to add value to the property by bringing the home down to its studs, adding square footage in the form of an additional bedroom and bathroom, and, creating a new open concept kitchen.
Though the borrower had very good credit, he didn’t have time to get conventional financing on this unique property. Instead, the borrower called Mortgage Vintage and secured a Fix & Flip loan on a 2-year term that would allow the borrower to retain the property as a rental at the conclusion of the remodel.
Most lenders would offer a loan term of 12-months for this type of project. MVI took the time to listen to the borrower and gain a full understanding of the borrower’s aspirations for the property. Adding a second year to the loan term gave the borrower some extra breathing room to decide if they ultimately wanted to add this property to their real estate quiver, or, put it on the market and take down profit.
Mortgage Vintage, Inc. (MVI) is a direct hard money lender that originates and funds business purpose loans for real estate investors and business owners. Many of our loans business purpose cash-out loans to Rehab a property that a real estate investor already has in his/her portfolio. We do these loans in both the 1st and 2nd position depending on the loan scenario. Below is a recent successful Rehab project that may be of interest to you.
The Subject:
- Address: Escondido, CA 92268
- Type: Single Family Residence
- Original Layout: 3 BR/2 BA
- After Rehab Layout: 4 BR/3 BA
- Condition: Poor, in need of remodel
The Scenario:
- Subject was a SFR in poor condition on 1.2 acres – the home needed a full remodel
- Borrower acquired the property from a family member
- Borrower had already began the remodel but needed access to more funds to complete the project
The Solution:
- The borrower contacted Mortgage Vintage, Inc.
- MVI met with the borrower, reviewed the plans and gave the borrower different loan options
- MVI provided a 55% LTV 1st TD based on the ARV value
- The new loan paid off an existing 1st TD and put enough cash into Funds Control to complete the project
- With MVI loan funds in hand, the borrower converted a 3 BR/2 BA into a 4 BR/3 BA and added over 600 SF of living area
The Numbers:
- As Is Value: $500,000 or $177/SF
- Rehab Cost: $60,000
- After Repair Value: $690,000 or $244/SF
- Loan Type: MVI Business Purpose Cash-out Rehab Loan