@Steve Felt
This is what the lender sent me:
This fix and flip or acquisition and rehab line of credit highlights.
Revolving and can be used over and over as you pay it down or off.
No employment or income verification
No tax returns required
Starting down payment 15% - will be reduced to 10% once third property is completed and 5% once fifth property completed
An "as is" and ARV (after rehab value) is required on each project
Line of credit starts at $500,00 – will increase as experience grows
Interest rate will decrease as experience grows
Max ARV is 70% - will increase to 75% once third property completed
Term 12 months INTEREST ONLY
LTC (loan to cost) – up to 85% - down payment is 15% of total acquisition & rehab cost
YOU CAN ACQUIRE MULTIPLE PROPERTIES AT A TIME
Please note we do not advance rehab funds at closing. Reimburse as work is completed, typically 2-3 draws. Contractor will require 30-50% of total rehab budget to start the project.
Fees
Points – depend on loan size and credit score – typically 2.5 – 3.5
Processing fee - $895
Appraisal fee – SF 12 unit - $595
Underwriting fee - $500 – paid one-time to set up line of credit
Draws – rehab escrow is required. They can be prepaid at closing – 3 draws for $535 or $265 per draw
Example
ARV $180,000 X 70% = $126,000 – this is the max loan amount however will only lend what you need
PP $100,000 + rehab $30,000 = $130,000 X 85% LTC = $110,500 loan amount
Rehab - $30,000 will go into rehab escrow – can take up to 3 draws
Monthly loan payment based on $110,500
$110,500 @ 9.99%/12 = $919 – interest only
Can buy rate down with interest reserves - -.50 for 6 months and -1.00 for 12 months
