Contractor/Borrower needed a fast Fix & Flip loan to secure a golden real estate opportunity:
- $656,250 1st Trust Deed
- 82% LTV on Purchase Price
- 66% LTV on ARV Value
- 9.50% Lender Rate
- $100k Construction Budget
- All Cash Offer for $1.305M
- Borrower Profit: $381,000
This Orinda property was in bad shape but also possessed a great deal of upside for an experienced investor with a crew in place and ready to get to work. The roof, kitchen, bathrooms, floors and windows all needed to be upgraded as well as the landscaping. The borrower knew the area well and was convinced that the home had “good bones” and that the large Orinda Hills view lot would be very appealing to a buyer once he and his crew completed the rehab.
Though the borrower was very solid from a credit and reserves standpoint, time was not on his side, as is often the case with a golden fix & flip or rehab opportunity. Having successfully worked with Mortgage Vintage in the past, the borrower knew that MVI would work quickly and diligently to underwrite, process and fund the acquisition. MVI’s efficient process allowed him to beat investor competition and get the property into escrow and close quickly. This is where having a working relationship with a successful private money lender can help an investor secure an opportunity over the competition.
We’re happy to report that the borrower is in escrow to sell the property with an all-cash offer for $1.305M. This project was a win on many different levels. The borrower secured the project because of his solid offer to the buyer, and, a subsequent quick funding through Mortgage Vintage. The seller and listing agent won because the borrower and Mortgage Vintage performed according to the terms of escrow – both getting their payday quickly after the initial offer was accepted. This was also a win for our trust deed investors because they made a double-digit return that exceeded the Guaranteed Interest period of three months. And when all was said and done, our borrower scored an entrepreneurial profit of $381k on the project – definitely another win for the borrower!
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: Orinda, CA 92268
- Type: Single Family Residence
- Layout: 3 BR/3 BA
- Square Feet: 1,687
- Condition: Poor, in need of remodel
The Scenario:
- Subject was a SFR in poor condition but with great upside
- Borrower was competing against other investor flippers to acquire the property
- Borrower was a previous successful Mortgage Vintage borrower and contractor
The Solution:
- The borrower contacted Mortgage Vintage, Inc. about the opportunity
- MVI immediately saw that the fix and flip opportunity has a great deal of upside
- The borrower and MVI were able to show a successful record of quick funding to the Realtor to get the home in escrow
- MVI provided a new 1st TD based on 66% LTV on the ARV and 82% LTV on the purchase price
- The new loan funded in 8 business days allowing the borrower to start the rehab process sooner than expected
- Borrower received all cash offer for $1.305M at the conclusion of the rehab
The Numbers:
- Purchase Price: $800,000 or $474/SF
- BPO Value: $870,000 or $516/SF
- Loan Amount: $656,250
- Lender Rate: 9.50%
- Rehabbed Property Sold for: $1.305M
- Borrower Profit: $381,000
