Fix and Flip Private Loan in the Panhandle of Florida

[Edwin Epperson]

Investment Info:

Single-family residence private money loan investment.

Purchase price: $79,900
Sale price: $165,000

We provided a 1st pos. loan to an experienced RE investor in the Panhandle of Florida, because of their experience and loyalty in using use for their funding we provided a 90% purchase loan and a 100% construction loan. They finished their project in 5 months and made $36K+ in Net Profits which put their Cash-On-Cash return over 300% in 5 months! You can read more about this specific loan, and view before and after photos on our Past Funded Deals blog HERE.

What made you interested in investing in this type of deal?

The renovation was generally cosmetic, and the borrower was an experienced investor who had used us multiple times. We value loyalty and personal experience more than anything. We are a relational lender, and we can accomplish this because we make "portfolio" loans, meaning we do not make loans to then be able to sell them on the secondary markets. We hold all our loans from loan app through payoff. You work with Blue Bay Capital only, the entire time.

How did you find this deal and how did you negotiate it?

We looked at the borrower's experience, their loyalty, and what the project entailed. We then made a reasonable offer on the amount of funding and the cost of our capital based on the risk factors that we saw prevalent at the time.

How did you finance this deal?

We financed this deal, by using our Turn-Key Private Lending solution. We submitted this loan opportunity to our Inner Circle and those Capital Investors wishing to participate, became a fractional investor, with other sophisticated investors, all in 1st position. They earned a return that faired way better than their other passive investments as well they shared in the upfront points we charged to our investor.

How did you add value to the deal?

By being able to close quickly (due to prior deals and only underwriting the deal) and we have an easy construction draw process that allows the investor to be reimbursed their construction expenses within 5 business days.

What was the outcome?

The RE Investor sold the property for a great profit, compared to the amount of capital they put into the project and were able to complete another project all within 12 months. That is the power of leveraging professional, private lender capital.

Lessons learned? Challenges?

This was one of those rare projects where the budget estimation was accurate and the timeline to completion was stellar. This only comes with personal construction experience on behalf of the investor and an "eyes-wide-open" approach to estimating a projected renovation budget and timeline.