Need Bridge Loan for Quick Closing....

[Chinmay J.]

So for last week or so I have been talking with a homeowner who seems to have fallen on hard times due to COVID-19. He lost his job 2 months ago, and is moving out of state. He has a townhouse in Chantilly, VA. ARV of about $500,000 He is interested in quick sale and not trying to get top dollar for it. According to him it requires rehab of about $30,000. I know this gentleman through a common friend.

This would be a great project for someone looking to rehab a property, but I don't have that kind of time or even inclination anymore. I want to buy, and sell it to another investor for a quick profit. Assigning the contract is not a good option for me.. A double close would be ideal. 

Trying to arrange financing for a double close, so need private funding for a few days at most.. If I can get someone lined up to buy the property not even that long. Not interested in paying the astronomical fees that HML charge, as I don't need a rehab loan..

I am not well versed with how this type of bridge loan market works, so making sure I am not being taken for a ride. 

[Kyle Altenau]

The kind of financing you're really describing here would be more transactional funding. Essentially you want closing to be A - B - C. The friend selling it is A, you are B, and the final buyer is C. I am assuming you want it set up this way so that A is unaware you are selling it quickly. Transactional funding is hard to come by and would typically be someone or a company you already have a well established relationship with. Two things about some other comments though. 

You mentioned you wouldn't want to go the hard money route because of astronomical fees, but over a short period, even a high interest rate wouldn't be cost prohibitive. If you had the loan amount of $500,000 for 12% and 2 points, your total cost would be $15,000. ($5,000 for one month of interest and $10,000 for the 2 points). If that's eating away at too much profit, you're probably overpaying for the property. I also may be biased, as I am a hard money and bridge lender. 

The other thing to keep in mind, if you did find transactional funding, it'd have even higher rates, but in this scenario, you'd most likely pay the loan off on day one so you'd get hit with minimum fees etc. Again, if it's going to make the deal happen and get you to the end goal of the profit, it should be worth it. 

How quickly do you need to close on it? If you'd want to send more information I can let you know what kind of options I could send you.