This rehabber simply needed a small amount of money to finish their project but were having a hard time finding a lender since their credit was so poor. As you will see the LTV was super low which made this a low risk opportunity.
- Rehabber requested $20,000 to complete a fix and flip (roof, landscaping, etc.).
- Rehabber had purchased the property at $115,000 and already had done $35,000 in renovations.
- Rehabber had used their cash for purchase and renovations to date. Owed = $0.
- ARV was $215,000 and therefore LTV = 9-10%.
- Rehabber FICO = 460
POSITIVES AND NEGATIVES
- Credit Score = FICO 460.
- Extremely low LTV.
- Rehabber had skin in game.
- Many renovations already completed.
- No liens or judgement on house.
- Taxes and Insurance paid.
- $20,000 loan at 12.5% per 6 months.
- Minimum 6 months interest.
- Accrued interest and paid in full upon sale – $22,500 paid when sale property.
- No points.
- Borrower pays for BPO, lender’s title policy and closing/escrow costs.
- $2,500 in 90 days.
- Annual ROI was 50%.
- PROFITS $32,500