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

  • Negative
    • Credit Score = FICO 460.
  • Positives:
    • Extremely low LTV.
    • Rehabber had skin in game. 
    • Many renovations already completed.
    • No liens or judgement on house.  
    • Taxes and Insurance paid.

LOAN TERMS

  • $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. 

RESULTS

  • LENDER
    • $2,500 in 90 days.
    • Annual ROI was 50%. 
  • BORROWER
    • PROFITS $32,500

 

 

%d bloggers like this: