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FAQs

Related Questions

FREQUENTLY ASKED QUESTIONS

Below you’ll find answers to the questions we get asked the most about our services.
What are the terms of your loans?

For our Standard Fix & Flip, New Construction, and Bridge financing solutions, we typically provide terms that span from 12 to 18 months, with the specific term length tailored to the project’s size.

In the case of our DSCR rental loans, these come with a 30-year term, offering a range of options for prepayment penalties and adjustable-rate mortgages (ARMs). These ARMs can include interest-only periods, should the borrower choose.

For Micro Loans, Gator Loan, Gap Funding, or any other innovative financing approach, we typically aim for a high return with a maximum term of six months.

Bridge Loans

Bridge loans are short-term financing options used to “bridge” the gap between immediate financing needs and longer-term solutions. They are often used for fix-and-flip projects, construction of new homes, and acquisitions of multi-family or mixed-use properties. The documentation required typically includes:

Loan Application: A formal application providing the lender with details about the borrower and the project.
Photo ID: Identification to verify the borrower’s identity.
Title Agent/Attorney: Contact information for the professional handling the property’s title work and closing.
Borrower Experience: Documentation of the borrower’s experience in investing in properties, demonstrating capability and risk mitigation.
Purchase Contract: A contract showing the property is being purchased under the name of the entity borrowing the funds, ensuring legal and financial clarity.
Rehab List/Budget: Detailed plans and budgets for renovations and improvements on the property, providing a clear use of funds.
Operating Agreement, EIN Letter, and Articles of Organization: Documentation proving the legal existence and structure of the borrowing entity, along with its tax identification number.

Rental Loans

Rental loans are designed for investors looking to hold properties long-term to generate rental income. This includes traditional rentals, DSCR (Debt Service Coverage Ratio) loans, AirBnB rentals, the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat), multi-family, and mixed-use rentals. The requirements often encompass:

Loan Application: Similar to bridge loans, providing details on the borrower and investment.
Title Agent/Attorney: Ensuring there is a point of contact for title and closing matters.
Borrower Experience: A history of the borrower’s real estate investment activities, including purchasing, selling, and renting properties.
Purchase Contract: Required if the property is being purchased, under the name of the borrowing entity.
Lease Agreement: For rental properties, showing the property is generating or will generate income.
Photo ID: For identity verification.
Operating Agreement, EIN Letter, and Articles of Organization: Establishing the borrowing entity’s legal structure and tax status.
Payoff and 6 Month Payment History for Existing Lien: If refinancing, documentation of the current mortgage and payment history is required.

These documents collectively provide lenders with a comprehensive view of the loan’s purpose, the property involved, the borrower’s ability to manage and repay the loan, and the legal and financial structure of the borrowing entity. Proper preparation and understanding of these requirements can facilitate a smoother lending process for real estate investors.

Our lender’s legal fee varies between $995 and $2000, with a processing fee set at $1000 and a wire fee of $40. Additionally, for every draw request, there is a draw inspection fee of $300.

It’s important to note that we have flexibility with our points and fees structure. This means we have the capability to forego charging points and instead, generate our revenue through various fees.

Our loan interest rates vary depending on the loan type and duration, and are affected by the borrower’s experience, credit score, and the details of the transaction. Currently, the starting rates for our Fix/Flip, New Construction, and Bridge loans are at 9.75%. For our Rental DSCR loans, the starting interest rate is 6.87%.

Our minimum for rental DSCR loans is 680 for novice investors and 650 for seasoned investors.

After a recent bankruptcy or foreclosure, we are unable to fund within 5years.
We leverage technology to streamline the draw reimbursement process, allowing you to submit photos directly from your home without the need for a third-party inspection company. This means our turnaround time for draw requests is just 24 hours!
With the exception of North and South Dakota, Minnesota, Vermont, and Idaho, we lend in every state.
Our lending criteria specify a minimum loan amount of $50,000 for both 1-4 Family Fix and Flip and New Construction projects. DSCR Loans for 1-4 Family properties begin at a minimum of $55,000. For rental DSCR loans, the minimum per unit for refinancing or purchasing under our term loan program is set at $100,000. In the case of Commercial 5+ Unit Bridge loans, the starting loan amount is $250,000, with the possibility of considering lower amounts on an individual basis.
Our points range between 0.75% and 3%, influenced by factors including the borrower’s experience, credit score, and the nature of the loan. These points are required to be paid at the time of closing, alongside any additional closing costs.

If you require extra time and your loan is current, including up-to-date payments and insurance, we are willing to collaborate with you. We evaluate extension requests on an individual basis, offering options for 30 days, 3 months, and 6 months, depending on the specific circumstances. Please note, loan extensions are subject to an extension fee ranging from 1 to 2 points.

Our Fix and Flip, New Construction, and Bridge loans come without any prepayment penalties, allowing for flexibility in early repayment. However, our Rental DSCR loans include optional prepayment penalties with durations ranging from 1 to 5 years, providing various choices to suit different financial strategies.

Both the agreement and the borrower(s) are under consideration. The operator is one of the deal’s assets, and a bad borrower can ruin a good deal. We want to know if this is a good deal and whether we can be confident that the borrower will fulfill their end of the bargain by finishing the project on schedule and giving the money back.

Our loans are referred to as “light doc” loans since we only consider the deal specifics, borrower experience, creditworthiness, and liquidity. We do not look at tax returns or income verification; instead, we require evidence of liquidity in the form of bank statements and a stated income personal financial statement.

Regarding the loans that we originate, we have complete control over all loan decisions. As available, we allocate our own funds to specific projects and oversee various capital sources to offer our borrowers optimal choices and adaptability.

Only loans for new construction, bridge loans, and live fix/flip are subject to a hard pull. We may ask to have an updated credit report on file for future projects after the initial 3-6 months period during which that credit report can be used for subsequent deals.
Indeed. As more deals close, we will reduce our leverages (LTC) and/or the percentage of the project that the borrower must bring into the deal (skin in the game). Merit-based, you can access our highest leverage tier, which offers 90% of Purchase and 100% of Construction up to a maximum of 70% ARLTV, after completing six or more projects.
Deals that weren’t buy-and-rent, new construction, or fix-and-flips aren’t accounted for. Experience would not be awarded for working in wholesale or handling projects for other investors when you are not a guarantor on the loan or LLC.

For a standard loan, we do not offer initial funding for construction. The reimbursement amount for completed work will be influenced by your arrangement with your contractors. You may request draw reimbursements upon completion of work and subsequent inspection. However, as a PERK, we are able to provide a portion of the construction budget upfront at the closing table to assist in kickstarting your project.

If the property is classified as rural, we might not be able to lend money depending on where it is located. Due to population density and our discomfort receiving comps that are reasonably close to the property, this is typically a problem.

Commercial properties are permitted under our terms and bridge loans, but only multifamily and mixed-use properties with five or more units that are over $250,000 and comprise more than 50% residential space will be accepted. We don’t make loans for properties with special uses or for pure commerce.

We do lend on properties damaged by fire, but our decision is primarily based on the operator’s strength and experience given the state of the property.
Since our loans are commercial in nature, we are unable to lend to an individual. Only one thing, i.e., can we lend to. LLC, C-Corp, S-Corp, and so on

After we finish the borrower interview, you can order both an insurance broker and a title company on your own if you have a preferred relationship with either. We can put you in touch with some of our recommended, carefully screened partners in each category if you would like recommendations on either. Each vendor’s contact information would be sent to us, and our staff would include it on all correspondence.

Indeed. We will carefully source the money prior to closing in order to close on the property and complete the project without running out of money. Before closing, the money would have to be transferred into a personal or business bank account. There is a three-month seasoning period for our Rental DSCR before all funds are released into your accounts.

Although lending on or refinancing with trust can be challenging, we can examine the trust documents case-by-case to identify any obstacles or whether lending to one would be prohibited. If we were able to lend to one, the trust would have to be irrevocable in every situation.

When using institutional capital, we are unable to offer lending in the second position for a seller finance deal. However, we do have access to private capital, which allows us the flexibility to potentially consider such scenarios. Generally, in these cases, we seek a high yield return with a maximum term of 6 months.
Because the property is used for commercial purposes, we are unable to lend on specialized housing such as bed and breakfasts, vacation rental properties, or hotels and motels.
We engage with a third-party AMC (Appraisal Management Company) or an appraiser who has been thoroughly vetted, for the valuation of all properties on which we provide loans. Should you have a preferred appraiser, we welcome you to submit their license, sample appraisals, and we will review their qualifications to potentially include them in our list of approved appraisers for future valuations.

For our Fix & Flip, New Construction, and Bridge loans, the closing period is usually set between 2 and 3 weeks. On the other hand, our Rental DSCR loans tend to close within a 4 to 5-week timeframe. That said, we can hasten this process if provided with exceptional levels of responsiveness, organization, and readiness. Moreover, our Fast-Track Process offers a way to significantly shorten this duration.

Opting for Fast Track allows you to receive priority processing for title, appraisal, and insurance services at the point of loan application, substantially cutting down on the processing time.

A member of our team will get in touch with us once our application has been finished and submitted to discuss the deal and the details—financials, experience, and next steps, among other things. If we decide to proceed after the borrower interview call, we will order the appraisal from one of our pre-screened sources through an approved appraiser or an Appraisal Management Company.