Sunshine and Hard Money

Sunshine and Hard Money

It is summer at last!

In the Pacific Northwest, that means it is time to play--or for those who are investing in real estate projects, perhaps the reprieve from the rain means that it's time to get to work on purchase and rehab projects. As much as 50% of the loans that we do are loans to builders, developers, rehabbers, and quick-flip artists. We have creative funding for all types of projects.

As an example: just over two weeks ago I had a borrower approach me about obtaining the funds to purchase and rehab three little mill houses in a small town East of Salem. The real estate market in this town has fallen flat and so the borrower was able to tie these properties up for the amazing price of $32,500 each (mind you these are small but respectable little houses). Though his credit was rough (due to some bad breaks with the sale of a business venture), he had an excellent plan for rehabbing and marketing these properties to Salem residents looking for bedroom community tranquility. What's more, the borrower was able to offer some additional collateral in the form of a second against a small commercial building that he owned and leased for a tidy profit.

We were able to loan him 100% of the purchase money, 100% of his rehab money, and 100% of the closing costs. The loan of $145,000 was closed in less than ten days (well before his purchase agreement expired), and the borrower--though paying a 5% commission and 15% interest--was not particularly concerned about these costs, as he plans to be in and out of the loan in as little as three months (with no prepayment penalty) and he expects to make a lively profit in the realm of $80,000 on the transaction.