FAQs

Questions? We have answers

Once you have completed the Sell Your Home Fast Form to the right one of our real estate solutions specialists will contact you shortly (usually within 24 hours). In some situations, we will need to gather additional information. We will research your property and discuss all the details with you. Our company may be able to buy your home directly from you right over the phone, or in most cases we will schedule a time with you to view the property and make you an offer!

Yes, I am a Realtor but I’m not acting as a Real Estate Agent. Hard Money Capital Group LLC is a Hard Money, Commercial & an SBA Lender. 

We are also  real estate investment and solution company. We are a property acquisition specialists that buy houses directly from sellers; 

 There is never a charge or a commission when we buy your property! However, if listing your property is the best solution then we can list it for you, and then we will be acting as a Real Estate Agent and the 6% commission rate will apply, 3% d]for the Buyers agent and 3% for the Sellers Agent and we will comply with TREC Rules and regulations. 

Contact us with your questions and we’ll be happy to assist you!  Call us right now at 512-713-9855

We don’t believe in Unicorns but occasionally there is one.

What?

It depends on how you have structured the deal. If you buy a property that is 65% of the market value and you have also included the repairs in that 65% then potentially yes a lender could provide 100% financing.

BUT take into consideration that you still have to pay:

Points

Legal feec

Doc Fees

Third party fees

Closing costs

So no, it’s not 100% funding

Investors usually use the 70% to 75% rule.

You take the ARV and you subtract 70% to 75% from the purchase price and also subtract the repairs and it’s a deal. Not really because that would mean the you are buying the property at 75% LTV and the lender will “fund” 65% of the PP for a “100% Deal”

Let’s brake the numbers

The perfect deal would be buying at 65%

$PP $100,000 ARV – 65% = $65,000 That’s what the lender will lend. 

Since the lender offers 100% of the renovation budget… Your deal is “100% funded”

A lender could potentially offer 100% financing but you still have to pay…

Points

Legal fees

Doc Fees

Third party fees

Lawyer Fees

Title company Fees

Any other Fess

Closing costs

Not 100% financing either

Word of caution:

there are many fake “Lenders” out there. Be sure to ask for references, and vet them before you decide if they are legit. There are many stories and they all sound the same.

This is NOT FINANCIAL ADVISE. 

Most frequently asked questions.

 

1-What’s my cost of capital?

2-How much money do I need to bring to the table?

3-What fees are involved?

4-Do I need to pay for an appraisal?

 To calculate your cost of capital you have to consider all the costs that are involved in a closing.

We will provide you with therms. Terms will include fees, Points, and interest.

Your title company or lawyer will provide you with their terms and Fees.

One thing that new investors don’t know is. When Hard Money Lenders provide terms that is just the cost of money. As an investor, you have to calculate your other costs.

What costs?

  • Real estate agents commission
  • Holding cost
  • Staging
  • Escrow
  • Title
  • Insurance
  • Inspection
  • Appraisal
  • Advertizing
  • Contingency
  • Second lien position
  • Gap funding
  • Etc.

Once you have all of the costs that are involved in your Real Estate deal you add the cost of Capital, points, Interest, and second lien to cover the GAP

Your ROI should be 15% or more to be successful in a Fix and Flip. 

We have created this page for YOU. We want you to understand that there is still work to be don and that you still need to provide your Hard Money Lender with the documents that will help them to continue the underwriting process. Once all documents are in place your HML will provide final terms and approval for your loan. If you accept the terms you will continue the process of getting your loan approved.

Congratulations! The loan has been conditionally approved. 

What happens now?

 
  • Now that the loan has been conditionally approved, you will need to provide your HML with all the documents that will help them underwrite your loan.
  • Providing these documents in a timely matter will make the process much faster and easier.
  • If you have the documents stored in a digital folder and you can share them with your lender. This will make the process much faster and it will show your lender that you are different from from other investors. 
  • Note: This list may not be the same for every lender, but having these documents updated and available will make it easier when the time comes.
 

What Documents will you have to provide your HML?

 
  • Completed loan applications for each individual owner and guarantor.
  • Recent bank statements evidencing funds required for closing and reserves.
  • Contact information for the title company or closing agent.
  • Completed Contractor Info Sheet from the primary contractor.
  • Handwritten LOE with LLC/Entity name letterhead.
  • Acknowledgment for business purpose loans SIGNED BY HAND.
  • Conditional Loan Approval: SIGNED BY HAND.
  • Disclosure Statement SIGNED BY HAND.
  • A most recent copy of Bank Note.
  • Purchase and sale agreement.
  • All addendums to the Purchase agreement
  • If buying a rental.
  • Purchase and sale agreement.
  • All addendums to the Lease agreement.
  • Copy of updated tenants rental agreement.
  • Copy of last  12 months notes Mortgage payments.

  • Last 12 months canceled checks for the rental property being purchased.

  • PHOTO ID

  • Other: Documents will be requested by the title company.

 

Insurance:

You will need to contact your insurance company and have them provide to your Hard Money Lender all the documents they request to.

What information do you need to provide to your HML?

  • Name of the Insurance Company
  • Insurance Agents full name
  • Phone number
  • Email Address
 

Title:

Mortgage payoff request

VOM subject

BP Disclosure form

Had Written LOE

Estimated Closing Statement

Leases

ID Forms

Evidence of hazard / Liability Insurance Coverage

Flood certification

Evidence of Flood Insurance

 

LLC Document Checklist:

 

The following documentation from you LLC/Entity must be provided for Underwriting.

Filed Articles of Organization/Certificate of Formation, including all amendments (or equivalent document required by the state).

Certificate of Good Standing (or an equivalent document) issued from the state in which the LLC was formed. The certificate cannot be dated more than 60 days prior to closing and must be provided regardless of the age of the company.

Signed Operating Agreement, including all amendments, attachments and schedules, if any. Note: Should the LLC not have any operating agreement pursuant to its state law, aMember List shall be acceptable.

A complete Member List showing all members and managers and their respective ownership interests.

EIN Number

Any other documents or certificates as reasonably requested by VCC or required under state law.

If the property is located in a state other than the state in which the company is incorporated, the following documents issued from the state in which the property is located shall also be provided:

A filed Certificate of Authority (or an equivalent document) showing the company is properly registered in that state.

A Certificate of Good Standing (or an equivalent document) dated within 60 days of the loan closing.

If the company’s ownership includes a non-natural person, documents concerning that entity may also be required to be submitted for revision.

 

 
 

 

A HARD MONEY LENDER is someone who is in the business of Lending money to Investors, (secured by Real Estate hard assets)  Hard money loans.  We only offer 1st lien position loan to guarantee the HML/PML that when the Real Estate asset is sold they get paid first. Every HML/PML has its own set of criteria, and so long as the terms and conditions are acceptable to both parties they make the loan.
 
A  PRIVATE MONEY LENDER is someone ~ who as the name implies ~ is someone who is privately funding Real Estate deals using their own private funds either using their self-directed IRA, solo 401k, or savings.
They can also lend money from a  family member, a friend, a local acquaintance. Other people do not have access to that person or funds, and they (lend PRIVATELY ) themselves are not necessarily looking to meet other investors and they are only interested in lending to you exclusively.

A rule of thumb to determine a property’s As-Is value

 

As-Is = ARV – (Rehab x 1.1)

 

Caps are used by lenders to determine the maximum loan amount based on their criteria.

They decide how much risk they are willing to take on each Investor and the property:

they know that if something goes South it will be very expensive to collect on the debt.

Based on that they decide what is safe for them and determine the LTV, LTC & ARV that they are willing to lend.

  • ARV – After Repair Value
  • LTC – Loan to Cost (Purchase + Rehab)
  • LTV – Loan to Value (As-Is)

When lenders provide a loan, they provide a percentage of the Purchase Price, a percentage of the Rehab Cost, or 100% of the Rehab Cost. Depending on the relationship of the Purchase Price with the Rehab Cost, the exact percentage of the first position loan changes with every deal, and this leads to the following question.

What percentage of the deal is the first position loan?

To calculate, it takes a little bit of math with the following formula.

[(Purchase Price Amount * Percent of Purchase Price) + (Rehab Cost Amount * Percent of Rehab Cost)] / (Purchase Price Amount + Rehab Cost Amount)

If the Purchase Price is $100,000, and the lender is providing 80% ($100,000 * .80); they’re providing $80,000. If the Rehab Cost is $50,000, and the lender is providing 100% ($50,000 * 1.00), they’re providing $50,000. The total being provided is $130,000, which is 86.66% (.8666) of the total project cost ($130,000 / $150,000).

The GAP is a percentage of the Purchase Price (10% – 20%- 30%), which the borrower provides at the time of purchasing the property.

Why?

When a lender makes a secured loan for a fix and flip project, they typically lend up to the value of the security/collateral. Up to the value of the collateral, MINUS two very important pieces.

1. The cost of foreclosing on, and liquidating, the collateral to recover the funds loaned out.

2. Enough “skin in the game” from the borrower, to make sure that they don’t abandon the project if the going gets tough.

 

What is the difference between Private Money and Hard Money?

There isn’t one because money is money, the only difference is in the terms and conditions for each individual lender.

 

What Questions should you ask your Lender?

 

When borrowing money, there are terms and conditions for obtaining it, and  there are terms  and conditions for repaying it.

 

What information and documentation will be required from you to that lender?

 

What fees will you have to paid to get your deal funded?

 

What security will be in place for the duration of the loan? Personal? The Real Estate Asset?

 

What happens in the event the funds are not paid back?

 

What compensation, Points and Interest will the Lender ask  in return for letting you borrow his funds?

 

How soon will you have to repay the funds?

 

What penalties will be set in place if you don’t repay the funds?

 

What happens if you deal goes south?

 

What should you evaluate when considering a HML?

 

Some lenders charge a higher interest rate, others charge points.

 

Some lenders charge points and interest.

 

Some care about credit scores, others don’t.

 

Some care about experience, others lend to first time investors.

 

Some lend at a higher interest and points to inexperienced investors?

 

Some lend 100% and charge 50% of the deal and manage the project themselves from start to finish.

 

Some lenders will lend 70% to 90% while others will only lend a piece of the purchase.

 

Some lenders will only  lend first position, while others are willing to take  the risk of lending in a a second position.

 

What are costs are involved when asking for a loan?  Every lender has different fees.

 

What other things are involved in the process of getting a Hard Money Loan?

 

Inspection criteria, application fees, underwriting fees, personal guarantees, closing costs, monthly or accrued interest payments…all of these are specific to the individual lender you are working with, and some may be negotiated.

 

 

Lenders base their loans on the (ARV) After Repair Value, and rely on appraisals for the ARV. Appraiser are trained on market conditions, (COMPS ) and compare properties sold on the MLS in the past 6 months, within 1/2 a mile from the subject property, not crossing over major roads, bodies of water or neighborhoods. Appraisers use the As-Is value, and the value of the work / improvements to be done on the subject property, to calculate the ARV.

The work to be done is provided by the borrower in the  form of a Repair Estimator / Rehab List / Scope Of Work (line items should include labor and materials).

 

Things considered on when appraising a property.

 

  • Adding Square footage
  • Bedrooms being added.
  • Bathrooms being added.
  • Finishes used when rehabbing the property.
  • Kitchens
  • Change in use.
  • Any significant changes which will result in added value to the subject property.
  •  

The appraiser does not know what the borrower / investor is planning to do, and since the appraiser cannot value what they don’t know about, the more information you provide in your SOW the better  understanding the appraiser will have to ensure an appraisal for the highest ARV.

 

  • Lenders charge a fee called points? Lenders charge Because they can…is what most would like to believe. In reality, it is to pay for the upfront work done to issue the loan. All the work necessary before the closing; from taking in the lead to sending the funds. Of course, investors don’t know any of this and only care about their ROI.
  • What’s work is involved when processing a loan?
  • Someone contacts the client and exchanges information (Marketing) 
  • Someone takes in the application, reviews the loan request, collects the necessary documents and information.
  • Someone underwrites the loan (does the due diligence on the loan) and moves the funds. Not to mention the cost of office space, utilities, salaries, and other overhead.
  • Some contact the Real estate agents involved in the closing to coordinate.
  • Some contact the Title company / lawyers involved in the closing to coordinate.
  • With a high enough loan amount, a high enough interest rate, high enough cash reserves, and a prior relationship with the borrower (that’s a lot of pre-requisites). Some lenders may be willing to add the points to the loan, to receive that compensation over the duration of the loan, or to waive them completely.
  • For the borrower, this arrangement lowers the entry amount while increasing the monthly payments.
  • For the lender, it increases the total earn, but delays being paid for work done. Not so good for the lender as it delays being paid for work already done, and in case of a default they are also faced with legal fees, more paperwork and the added risk of losing compensation for that already done work.
  • Why do lenders charge points? Lenders charge to pay for taking the risk of lending money to a complete stranger hoping that stranger knows what he or she is doing and in the end, the property is sold for the projected ARV, and let us not forget about the work of processing and issuing the loan.

Why don’t lenders want to use the appraisal provided to them by Investors (and already paid for), and instead want to order a new one? To prevent fraud.

 

Unfortunately PDF documents can be edited and information adjusted, without the appraiser or lender knowing about it. This is why lenders work with companies such as Appraisal Nation to order an appraisal, which goes directly from the appraiser to Appraisal Nation, and then to the lender, without a chance for tampering.

 

Appraisal management companies such as Appraisal Nation make it a 3rd party appraisal, with no bias for the borrower or the lender, based on recent sold comps in the direct vicinity.

 

Additionally some appraisals may be ordered without, and as a result be missing, necessary information such as the As-Is value and flood certification.

 

Some lenders don’t lend on properties considered rural. Comps may be very difficult to pull, the buyer pool is smaller, holding times are longer…whatever the reason they just don’t.

Determining if a property is a rural helps save time by working with the appropriate lender.

One tool to use to determine if a property is rural is the Consumer Financial Protection Bureau’s – Rural and underserved areas tool.

Lenders are not appraisers. Lenders use a 3rd party appraisers to perform an appraisal, and to provide an independent (unbiased) opinion of the property’s value. Lenders rely on the appraisal for many things) like the as-is value, the subject to renovations,  After Repair Value (ARV), and flood certification.

 

Lenders do not change appraisals to suit their needs (at least they shouldn’t), they use them to verify the numbers provided by the investor / borrower, and lend based on those numbers. When capping at X% of the ARV, the appraisal (among other possible sources such as Broker Price Opinions, and Realtor comps) is where the lender obtains the ARV.

 

When the appraisal comes in at the projected value, or higher, the project proceeds as planned.

 

When the appraisal comes in below the projected value the loan parameters may adjust, or the project may be cancelled.

 

It could be possible that the appraiser is incorrect and the appraisal may need to be disputed, this is something for the investor to review and discuss with the  appraiser and the lender. One thing to have in mind is that appraisers are licensed and rely on the etiquette on conduct which includes having a strong moral code of conduct when performing their duty and appraising a property. Not following the rules will get them, fine, suspended and  potentially have their licenses revoked.

 

Whatever the scenario once the appraisal comes in, the lender is using the appraisal to verify the values, not adjust them to fit their needs. That is the purpose of the independent appraiser and their appraisal; an honest, unbiased, neutral party’s educated and trained opinion of the value.

 

Underwriting

Why does it feel as though lenders are changing loan terms, and coming up with unreasonable and strange requests at the last minute? 

 

NOT AT ALL.

 

In the loan process there is something called underwriting, the review of all loan documents, and verification of the deal information; the lender’s due diligence. Rates and terms are quoted based on provided information, it is only after underwriting that firm commitments and contracts are issued. This is similar to making an offer after walking a property, and then adjusting the offer, or keeping it, based on the home inspections.

 

This is the last step before closing is scheduled, the property is purchased, and the loan is closed, but it does not begin until the appraisal is received by the lender; one to two weeks after the loan process was started and the appraisal was ordered. When the appraisal comes in is when underwriting begins, even though the loan application and documents may have been submitted weeks prior.

 

As the loan is reviewed, based on the available information, changes may be required and requested by the underwriter. Because of the truncated schedule investors operate on, this underwriting is happening days before the scheduled closing. As a result any changes, justified as they may be, feel like they are being made and requested unfairly, at the last minute.

 

Providing all requested documentation promptly, and allowing a few extra days for underwriting prior to closing, makes the process smoother and easier for all. It may feel like so much time has passed, and if there were issues with the loan something should have been mentioned, but in reality until all information is available the loan file just waits. And all information is usually available with the closing only days away, and no time to spare.

 

Hard Money Capital Group, LLC is an asset-based lender, and loan amounts are based on the value of the real estate asset that is being pledged as collateral. Max loan-to-value varies by loan program. We also look at the Investors experience and credit score.

What documents are required for a loan application?

Hard Money Capital Group, LLC requires basic documentation to underwrite the borrower and the property. This includes an application; authorization to run a credit report and background check; copies of bank statements (proof of funds); property appraisal; copies of leases, if appropriate; renovation estimates; and documentation on the business entity and other documents listed below.

We have created this page for YOU. We want you to understand that there is still work to be done and that you still need to provide to us all the documents that will help us underwrite the loan. Once all documents are in place we will provide final terms and approval for your loan. If you accept the terms you will continue the process of getting your loan approved.

 

Congratulations! The loan has been conditionally approved. 

What happens now?

  • Providing the required documents in a timely matter will help us process the loan much faster.
  • If you have the documents stored in a digital folder you can upload them to our portal. 
  • Note: The list of documents will not be the same for loan, but having these documents updated and available will make it easier when the time comes.
 

What Documents will you have to provide your HML?

  • For pre-approval, the following documentation must be provided for Underwriting
  • Completed loan applications with all applicants.
  • Signed term Sheet
  • Purchase and sale agreement
  • Contact information for the Insurance company
  • Contact information for the title company or closing agent.
  • SOW Scope od Work
  • Signed ACH Form
  • Government ID
  • All addendums to the Purchase agreement
  • If buying a rental.
  • Purchase and sale agreement.
  • All addendums to the Lease agreement.
  • Copy of updated tenants rental agreement.
  • Other: Documents will be requested by the title company.

 

What information do you need to provide to your HML?

  • Name of the Insurance Company
  • Insurance Agents full name
  • Phone number
  • Email Address

 

Evidence of hazard / Liability Insurance Coverage

Flood certification

Evidence of Flood Insurance

LLC Document Checklist:

The following documentation from your LLC/Entity must be provided for Underwriting.

Filed Articles of Organization/Certificate of Formation, including all amendments (or equivalent document required by the state).

Certificate of Good Standing (or an equivalent document) issued from the state in which the LLC was formed. The certificate cannot be dated more than 60 days prior to closing and must be provided regardless of the age of the company.

Signed Operating Agreement, including all amendments, attachments, and schedules, if any. Note: Should the LLC not have any operating agreement pursuant to its state law, aMember List shall be acceptable.

A complete Member List showing all members and managers and their respective ownership interests.

EIN Number

Any other documents or certificates as reasonably requested by VCC or required under state law.

If the property is located in a state other than the state in which the company is incorporated, the following documents issued from the state in which the property is located shall also be provided:

A filed Certificate of Authority (or an equivalent document) showing the company is properly registered in that state.

A Certificate of Good Standing (or an equivalent document) dated within 60 days of the loan closing.

If the company’s ownership includes a non-natural person, documents concerning that entity may also be required to be submitted for revision.

*Additional conditions may apply for rental properties.

PTD Conditions Description

  • Mortgage Pay-off Demand For subject property: For subject property
  • VOM Subject: Recent Mortgage statement and las 12 cancelled checks for proof of payment
  • BP Disclosure Form: And a CLA to be designed with LIVE SIGNATURE or DocuSign Only
  • Handwritten LOE: Describe the business purpose, occupancy intent, and proposed use for any cash received.
  • Must be on borrowing Entity Letterhead.

 

Estimated Closing statement

  • Leases: For tenant occupying residence
  • ID Forms: Social Security Card 
  • Evidence of Hazard/ Liability Insurance Coverage: See Attached request form
  • Preliminary Title Report: Title commitment with 24 months chain of title, Plat map. Tax cert, Wire, ad PCL
  • Flood Certification: property in a flood zone: Flood zone notice to be signed by the borrower
  • Entity Documents: For your Entity ( Better Neighborhoods LLC)
  • Evidence Of Flood Insurance     

Some lenders will ask for more documents not mentioned on this list to help them approve the loan.

Hard Money capital Group, LLC terms vary by loan program. Here is a basic breakdown of Hard Money capital Group, LLC most popular programs:

Short-Term Bridge

  • Term: 12 Month & 18 Month Loans
  • Min Loan Amount: $75k
  • Max Loan Amount $10M
  • Minimum Property Value: $100k
  • Rates: Starting at 7.99%
  • LTV for Purchase: Up to 85%
  • LTV for Refinance: Up to 80%
  • LTV for Cash-Out: Up to 75%
  • Property Types: Residential 1-4 Units; Condos; PUDs, Townhomes; 5+ Unit Apartments; Mixed-Use Properties and many more
  • Occupancy: Non-Owner Occupied
  • Minimum FICO: 650

After Repair Value (ARV) Loan Program

  • Term: 12 Months
  • Loan Amount: $75k – $5M
  • Minimum Property Value: $100k
  • Rates: Starting at 7.99%
  • LTV: Up to 75% of After Repair Value
  • LTC (Loan-to-Cost): Up to 85% of Purchase Price, Up to 100% of Rehab Costs
  • FICO: 650 Minimum Credit Score
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Termination Fee: 1% After Month 9
  • No Pre-Pay Penalty

Buy-to-Rent Loan Program

  • Term: 24 Months with 6-Month Extension Option
  • Loan Amount: $100k to 5M
  • Minimum Property Value: $75k
  • Rates: Starting at 7.99%
  • LTV for Purchase: Lesser of up to 75% of the As-Is Value or Up to 75% Loan-to-Cost
  • LTV for Refinance: Up to 75%
  • LTV for Cash-Out: Up to 75%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Pre-Pay Penalty: 5% Prior to Month 6
  • Extension Fee: 1% for 6 Months
  • Minimum FICO: 650

Long-Term Rental Loan Program

  • Term: 30 Years
  • Loan Amount: $100k to $5M
  • Minimum Property Value: $100k
  • Rates: Starting at 3.75%
  • LTV for Purchase: The Lesser of up to 80% of As-Is Value or up to 80% Loan-to-Cost
  • LTV for Refinance: Up to 80%
  • LTV for Cash-Out: Up to 75%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; Planned Unit Development (PUD)
  • Pre-Pay Penalty: Prepays adjustable up to 5 years
  • Minimum FICO: 650
  • Points and interest are based on the investor’s experience and the loan program selected.
  • Interest Rates, fees, and other important or minor details are subject to change without notice and are based on market conditions, due diligence, and input by underwriting.
  • If your project is approved, a formal loan commitment will be issued.
  • Time frames for each portion of the process vary due to market conditions and other factors like third parties.
  • There are no guarantees that your loan will be approved.
  • Hard Money Capital Group LLC is not responsible for external factors like market conditions, appraisals, etc.

NO, Hard Money capital Group, LLC does not charge any upfront fees during the pre-approval process.

*Do you charge a lender’s fee?

Yes, After terms are approved by the borrower and the approval process has started, the borrower will pay and lender fee for the application that will cover doc prep fees, etc. 

 

A list of costs and fees will be provided with the term sheet.

*Are there any other fees?

The borrower is responsible for all third-party fees such as appraisals, HUD, Title, Lawyers fees, or project feasibility studies.

YES, Hard Money Capital Group, LLC offers an After Repair Value loan program for non-owner occupied 1-4 family & multi-family real estate, condos, townhomes, 5+ unit apartments, & mixed-use properties.

*Some loan programs lend up to 90% of the purchase price and up to 100% of the renovation costs, not to exceed 75% of the after repair value.

*Some loan programs lend up to 90% LTC

*Some loan programs lend up to 80% LTC

*some loan programs lend up to 75% LTV

*Points and interest are based on the investor’s experience, Credit Score, and the market that the property is in.

*Terms will be provided to the borrower for final approval.

YES, Hard Money Capital Group, LLC will gladly compensate you for a referral that results in a closed loan, pursuant to local rules and regulations AS LONG AS YOU DISCLOSE TO THE BUYER THAT YOUR FEE WILL BE ADDED TO THE TRANSACTION.

It is up to you to determine whether you are legally able to accept a referral fee.

If you are interested in receiving more information about our Broker Program, please fill out the contact form on the “ Brokers program tab “ on our website and you will receive  Hard Money Capital Group, LLC Broker Registration Package. Once you complete these forms via DocuSign, you can start referring deals immediately.

You can also send us an email explaining why you would like to become a Broker for Expedia Homes, LLC

[email protected]

Hard money loans are a specific type of asset-based loan that is typically secured by real estate. At Hard Money Capital Group, LLC, loans are backed by non-owner occupied residential real estate or small balance commercial real estate. In some cases, multiple non-owner occupied properties are cross-collateralized in order to secure the needed loan amount.

Commercial loans are used for business purposes, rather than individual or personal interests. At Hard Money Capital Group, LLC. On Hard Money loans we only make commercial loans that are secured by non-owner occupied residential and commercial real estate.

Terms will vary if it’s a Hard Money Loan, A Commercial Loan, or a Federal Loan backed by SBA

A bridge loan is typically interim alternative financing used by a business until more conventional financing is secured. The bridge loan may also be used to cover short-term cash-flow issues. Usually is 1% to 1.5% of the transaction.

SBA 7(a)

 

7(A) ELIGIBLE USE OF FUNDS –UP TO $5MM

•Business Acquisition

•Real Estate Purchase

•Debt Refinance

•Construction/Renovations

 

TERMS AND FEES

•Business loans 7 years –10 years

•Equipment, 10 -15 years

•Real Estate up to 25 Years

•Fully Amortized, no Balloon, call or prepayment

•10% “Equity” Injection Required

•Cash or Equity in an existing business = 100% financing

Interest Rate Calculation -Wall Street Journal Prime Rate + Margin

•3.25% + Margin (1.5% to 2.75%) = max rate of 6%

•SBA Guarantee fee = 2 -3.75% of guaranteed portion Reduced to 0%

•Third Party Fees =  Appraisals, title escrow

•Bank Fees = $0.00

 

SBA ELIGIBLE BUSINESSES 

*FOR A FULL LIST OF ELIGIBLE BUSINESSES CLICK HERE*

•Owner User Owner Operated Business

•Less than $5 million Net Income less than $15 million Net Assets

•Government Estimates 30 million existing businesses

•Located in the US or Territories

•Passive Income Investment Properties

•Residential Homes or Apartment Complexes

•Residential Mobile Home Parks **

•Pawn Shops

•Businesses Engaged in Lending

•Personal Care Businesses that Rent Space

•Gambling Businesses

•Businesses engaged in illegal Activities –Cannabis

•Any Business or Person that caused a prior loss to the government

 

NEW SBA LOAN COVID RELIEF BENEFITS

 

INCREASED GUARANTY FROM THE SBA

•90% guarantee on SBA 7a loans up to $3,750,000

•7a loans have a standard 75% guarantee for loans up to $5 million

•Guaranty enhancement ends 09/30/2020

 

DECREASED GUARANTY FEE TO 0%

•SBA 7a loans have a guarantee fee ranging from 2 -3.75%

•Guaranty fee on a $5 million 7a loan is normally $138,000

•The fee is reduced to 0% effective immediately

•Fee waiver ends when funds are depleted or 09/30/2020

 

INCREASED SBA EXPRESS LINE OF CREDIT 

•SBA express maximum increased to $1 million until 09/30

•Permanently increased to $500K after 10/1/21

•Loans up to $350K receive a 75% guarantee until 10/1/21

•Full underwriting, collateral and life insurance rules still apply

 

NEW SBA LOAN PAYMENT SUBSIDY 

•SBA will make 3 months of the borrower’s principal & interest payment

•Subsidy payment up to $9,000 per month

•Effective for loans funding after February 1st

•Fee waiver ends when funds are depleted or 09/30/2021

•This is limited to one Loan

 

SBA Building Purchase Equity Subsidy

•Business Equity may be used as the Down Payment for a Building Purchase

•The program requires at least a 10% “equity injection.

•Equity may be in the form of cash out of pocket or “the equity in the business.”

•Depending on the existing value of the business, the business may qualify for up to 100% financing by using that existing business equity.

 

7A COMMERCIAL BUILDING PURCHASE EXAMPLE

 

Standard 7a Loan

Purchase Price$2,000,000

10% Cash Injection$   200,000

SBA Guaranty Fee $     50,625

Loan Amount $1,850,625

Monthly P&I Payment $11,089

 

New SBA 7a Loan after Feb 1

Purchase Price$2,000,000

10% Equity Injection**$   0

SBA Guaranty Fee $0

Loan Amount$2,000,000

Monthly P&I Payment $12,281

Less SBA Payment Subsidy$  9,000

Net Monthly Payment $  3,281

(For the First Three Months)

Total Buyer Savings $268,625

 

NEW BUSINESS ACQUISITION

Purchase Price:  $975,000

Equipment$40,000

Closing Costs:$35,000

Tenant Improvements:     $85,000

Total Project Cost:    $1,135,000

10% Equity Injection  $113,500

90% 7a Loan $1,021,500

10 Year Term 5.75% (WSJ Prime + 2.5%)

Monthly Payment:        $11,212

•Principal and Interest

 

Sellers Adjusted Net Income

Needed to Qualify:$200,000

SBA 504 Loans

 

504 ELIGIBLE USE OF FUNDS –UP TO $20MM

•Real Estate Purchase –Owner/User Properties

•Capital Equipment 

•Improvements

•Land Purchase

•Construction

•Can be funded simultaneously with 7a

 

SBA 504 LOANS

•Real Estate Purchase or Construction or Refinance

•51% occupancy existing property

•60% occupancy new construction

 

The 50,40,10 Loan

•LOB Commercial 50%,

•Certified Development Company (CDC)40% ($5.5MM)

•Borrower Invests 10% (15 -20%)

•Maximum project cost  to $14,000,000 with 10% down payment

 

504 TERMS AND FEES

Conventional Bank Loan 4 to 5.5% rate,  25-year amortization

Prepayment Penalty: 5 years

Fees: 1% origination

Third Party FeesAppraisal, Escrow, Title, EPA 

SBA/CDC Loan 2.6% rate, 25 year fixed & amortization 

Prepayment Penalty: 10 years 

Fees 2.7% + .5% on conventional loan

 

504 COMMERCIAL BUILDING PURCHASE EXAMPLE

Purchase Price:  $7,500,000

Equipment$280,000

Closing Costs:$178,000

Renovations:     $585,000

Total Project Cost:    $8,543,000

 

50% Commercial Loan   $4,271,500

40% SBA/CDC Loan$3,417,200

10% Cash Injection$854,300

Conventional payment  $24,970

SBA/CDC payment  $15,502

Total monthly payment:        $40,472

•Principal and Interest

•Less SBA Payment Subsidy-9,000

 

Total monthly for the 1st Six months:       $31,472

SBA DIFFERENCES BETWEEN 7(a) AND 504 LOANS

 

7a

•1 Loan and one payment

•SBA Guarantee Fee and 0 Our Bank fees   

•3 years prepay > 15 years

 

504

•2 loans and two payments

•SBA and (CDC) fees plus 1% origination fees

•5 –10 year prepay

•Certified Development Company (CDC)

 

7a

•PLP processing

•Flexible use of funds

•75% guarantee from SBA

•90% international trade 

 

504

•Conventional Processing + partner with a CDC

•Real estate or capital equipment

•40% guarantee from SBA

 

 

7a

•Fixed and Variable Rates

•WSJP + 2.75%

•25 year amortization   

•7a can be funded with a 504

 

504

•Fixed Rates

1st 4 -5%

25 year amortization 10 year term

2nd 2.6% fixed for 25 years

The U.S. Small Business Administration (SBA) works with lenders to provide loans for small businesses across the country. An SBA 504 loan is a long-term financing solution for business owners to buy commercial real estate, machinery, equipment or other fixed assets.

 

Structure

SBA 504 loans are structured differently than other SBA loan programs and it’s important to understand that 504 loans are composed of three distinct parts—the lender, Certified Development Company (CDC) and a borrower. In most cases, SBA 504 loans are structured in a 50-40-10 model. First is the bank loan, which is 50% of the total amount. Second is a Certified Development Company (CDC) who provides 40% of the total loan amount. And third is the borrower who provides a 10% down payment. New businesses that have been in operation for less than two years, as well as special purpose properties, are required to provide an equity amount of 15%, creating a 50-35-15 structure. If you are both a new business AND a special purpose property, the borrower’s equity requirements change to 20%, following a 50-30-20 model.

 

What is a Special Purpose Property?

The SBA defines a special purpose property as “a property that is appropriate for one use or limited use: a building that cannot be converted to another use without a large capital investment.” This includes but is not limited to: amusement parks, cemeteries and funeral homes, nursing homes/assisted living facilities, hotels and motels, wineries, museums, gas stations and hospitals. A complete list of special purpose properties can be found in the SBA’s SOP linked here.

 

What is a CDC?

Approved and regulated by the SBA, a Certified Development Company (CDC) is a nonprofit corporation which aims to support their local economy. With over 260 CDCs throughout the nation, each office has a specific regional focus. CDCs typically have a strong grasp of the region’s unique needs and challenges, making them well-suited to foster long-term growth within their community. CDCs are certified to originate and service SBA 504 loans and work directly with lenders to provide financing to small businesses, contributing to economic development.

 

504 Loan Example

Let’s talk through how a 504 loan works in real life. Robert is a small business owner who needs $1,000,000 to renovate his current building, as well as upgrade some heavy machinery for his business. His lender provides $500,000 for the first loan, while a CDC provides $400,000 through an SBA-guaranteed debenture and finally, Robert is responsible for the remaining $100,000 as a down payment. Robert will make payments on his 504 loan directly to his lender.

This image shows the breakdown of an SBA 504 loan structure example at Live Oak Bank.

 

While the eligibility requirements for a 504 loan are nearly the same as for the 7(a) loan program, the approved uses of the loan are different. They fall into three main categories: buying commercial real estate, financing improvements within that real estate and purchasing large equipment. The maximum loan amount can be up to $15 million with maturity rates up to 25 years and low, fixed interest rates.

 

If you’re interested in learning more about SBA 504 loans and if this loan program would be a good fit for you, start the discussion with us 512-713-9855 or start the process here

SBA loans include a guarantee from the U.S. government — meaning the SBA reimburses the lender for a portion of the loan in case of a default. Because of this guarantee, entrepreneurs have access to small business loans with more competitive rates and terms than many conventional loans. It’s important for borrowers to understand that the SBA charges lenders a guarantee fee in exchange for backing a portion of the loan, and lenders typically pass that fee onto borrowers.

 

The Economic Aid Act, passed by Congress in December 2020, modified the SBA 7(a), 504, and Microloan programs to help small businesses get the money they need during this difficult time. Part of that modification includes changes to the SBA loan fees. Subject to the availability of funds, beginning December 27, 2020, through September 30, 2021, for all 7(a) loans (including Community Advantage loans) approved, the SBA Guaranty Fee (Upfront Fee) is reduced to zero. This is a significant savings to small businesses who qualify. To better understand how SBA loan fees work and what the savings opportunities could be, here is a breakdown of the most common questions about SBA loan fees.

 

How much is the SBA 7(a) loan guarantee fee?

The fee is calculated by taking both the loan amount and the loan term into consideration. In general, larger loan amounts and longer terms equate to a larger fee percentage. However, the fee is only based on the portion the SBA guarantees. The chart below provides an overview of what borrowers can expect to pay, based on loan amount and loan term.

 

 

Let’s walk through an example.

 

Kate, a small business owner who is acquiring an investment advisory firm, secures a $1 million SBA 7(a) loan with a 10-year term, which means that the SBA guarantee fee is 3.5%. But Kate is not responsible for paying 3.5% of $1 million – she is only paying 3.5% on the guaranteed portion. The SBA guarantees 75% of all 7(a) loans over $150,000, so Kate’s loan is guaranteed for $750,000. She is responsible for paying 3.5% of $750,000, which comes to $26,250.

 

For loans between $700,000 – $5 million, the fee is 3.5% of the first $1 million guaranteed ($35,000) plus 3.75% of the remaining guaranteed amount. This math can get confusing, so discuss the specifics with Us.

 

How much is the SBA 504 loan guarantee fee?

The SBA charges 0.5% on the amount funded by the Certified Development Company (CDC) for all 504 loans. We encourage borrowers to discuss additional fees on 504 loans with their lenders.

 

What other fees can be expected with SBA loans?

As we guide our borrowers through the loan process, We will walk them through any additional fees. Some of these include packaging, servicing, and possibly prepayment penalty fees. We work diligently to educate our borrowers and ensure they fully grasp these fees.

 

With the new SBA loan enhancements, what are the savings opportunities on SBA fees?

For new loans approved between February 1- September 30, 2021, borrowers will not have to pay any SBA loan fees. There are significant savings opportunities associated with this, including three months of subsidy payments. For example, if our borrower Kate gets a $2,000,000 loan from Us with a 10-year term, she will save over $98,000. Those extra savings can then be reinvested in Kate’s business for a variety of growth purposes. See the chart below for a detailed breakdown of what fees will be waived for her loan. Please note that interest rates vary and the rate below is simply an example.

 

 

We are committed to the success of small business owners across the nation. With the enhancements to the SBA loan programs through the Economic Aid Act, our lending experts can help our borrowers take full advantage of the benefits, including no SBA fees. Reach out to Us to learn more about the limited-time SBA loan enhancements.

 

Apply Now

Under normal circumstances, the SBA’s loan programs offer many advantages for small businesses trying to secure capital. With recent economic aid passed by Congress (Economic Aid Act), the benefits for small business owners are even better. Let us support you and your small business with the new SBA loan enhancements, including:

  • SBA will pay your principal and interest for up to three months up to $9,000
  • No SBA fees, subject to change based on additional guidance from SBA
  • Fully amortized/no balloons
  • Loans can include working capital to support your operations
  • Loans from $250K – $5M+, varies by product
  • Loan terms 10 years for business acquisition, up to 25 years for real estate
  • No prepayment penalties for loan terms under 15 years 

Loans that are approved between 2/1/21 and 9/30/21 will receive these benefits once the loan is fully disbursed, subject to the availability of funds. Live Oak is dedicated to getting capital in the hands of small businesses across the country. To better understand the difference between SBA 7(a) loans and SBA 504 loans, we’ve highlighted some of the key differences here. Let our experienced lending team help you determine which loan program is the best fit for your business needs.

 

SBA 7(a) Loan Basics

The SBA 7(a) loan is the most common SBA loan product, offering flexibility on terms and business uses. SBA loans allow businesses to obtain capital with less equity than a conventional loan. As the nation’s number one SBA 7(a) lender by dollar amount,* We will help you simplify the loan process. Our Preferred Lender Status (PLP) with the SBA gives us authority to make final credit decisions without having to get SBA approval.

There are countless advantages to the SBA 7(a) program, including:

  • Up to 90% bank financing
  • Minimal collateral requirements
  • Fully amortized/no balloons
  • No pre-payment penalties for loan terms under 15 years

The 7(a) loan program is the most popular because the borrower can use the capital for a wide range of uses, including:

  • Business/practice purchase
  • Partner/manager buyout
  • Expansion through acquisition
  • Real estate purchase including ground-up construction and tenant improvements
  • Refinance existing business debt
  • Purchase equipment

Here’s an overview of how the SBA 7(a) loan program works.

  • Maximum loan amount: $5 million
  • Interest rate: Varies based on the prime rate plus lender spread
  • Down payment: Typically 10% of the project amount
  • Collateral: Personal guarantees required from all owners of 20% or more of the business; Personal assets may be required to meet SBA collateral guidelines
  • The common loan terms for SBA 7(a) loans are the following:
    • Business acquisition (no real estate) – 10-year maximum
    • Machinery and equipment – 15-year maximum
    • Real estate (51% or more allocated to real estate) – 25-year maximum

As a small business owner, the 7(a) loan program may be a good fit for you if the following apply:

  • Profitable existing business
  • Acceptable debt service coverage
  • Good personal credit score (650 minimum)
  • For-profit business
  • Two-year average net profit after taxes up to $5 million
  • Located in the United States

If you’d like to reach out and discuss your options about securing capital with an SBA 7(a) loan, here is what we need to get started.

  • Purpose of the loan
  • Business background and plan
  • Business debt schedule
  • Personal tax returns (three years)
  • YTD financials
  • Personal financial statement
  • Other eligibility information (personal background, character, credit)
  • Resume
  • Business tax returns and financials (three years from existing business and/or selling business)
  • Projections

*#1 SBA 7(a) Lender by dollar amount for FY 2020– the data supplied by the SBA reflects 7(a) highest dollar volume during FY 2020.

 

SBA 504 Loan Basics

An SBA 504 loan is a long-term financing solution for business owners to buy commercial real estate, machinery, equipment or other fixed assets.

 

Structure

SBA 504 loans are structured differently than other SBA loan programs and it’s important to understand that 504 loans are composed of three distinct parts—the lender, Certified Development Company (CDC), and a borrower. In most cases, SBA 504 loans are structured in a 50-40-10 model. First is the bank loan, which is 50% of the total amount. Second is a Certified Development Company (CDC) who provides 40% of the total loan amount. And third is the borrower who provides a 10% down payment. New businesses that have been in operation for less than two years, as well as special purpose properties, are required to provide an equity amount of 15%, creating a 50-35-15 structure. If you are both a new business AND a special purpose property, the borrower’s equity requirements change to 20%, following a 50-30-20 model.

 

What is a Special Purpose Property?

The SBA defines a special purpose property as “a property that is appropriate for one use or limited use: a building that cannot be converted to another use without a large capital investment.” This includes but is not limited to: amusement parks, cemeteries, and funeral homes, nursing homes/assisted living facilities, hotels and motels, wineries, museums, gas stations, and hospitals. A complete list of special purpose properties can be found in the SBA’s SOP linked here.

 

What is a CDC?

Approved and regulated by the SBA, a Certified Development Company (CDC) is a nonprofit corporation that aims to support its local economy. With over 260 CDCs throughout the nation, each office has a specific regional focus. CDCs typically have a strong grasp of the region’s unique needs and challenges, making them well-suited to foster long-term growth within their community. CDCs are certified to originate and service SBA 504 loans and work directly with lenders to provide financing to small businesses, contributing to economic development.

 

504 Loan Example

Let’s talk through how a 504 loan works in real life. Robert is a small business owner who needs $1,000,000 to renovate his current building, as well as upgrade some heavy machinery for his business. His lender provides $500,000 for the first loan, while a CDC provides $400,000 through an SBA-guaranteed debenture, and finally, Robert is responsible for the remaining $100,000 as a down payment. Robert will make payments on his 504 loans directly to his lender.

 

 

While the eligibility requirements for a 504 loan are nearly the same as for the 7(a) loan program, the approved uses of the loan are different. They fall into three main categories: buying commercial real estate, financing improvements within that real estate and purchasing large equipment. The maximum loan amount can be up to $15 million with maturity rates up to 25 years and low, fixed interest rates.

Let’s discuss opportunities and determine how we can take advantage of the SBA’s loan enhancements to grow your business, together. For more information, Click here

Picture this: after many years of running a successful business, you and your business partner have come to a crossroads in your professional relationship. It’s time to part ways. You’d like to buy your partner’s share of the business, but you’re unsure how to go about it. Securing the funds for a business partner buyout has been a common hurdle — until recently.

The Small Business Administration adjusted their business partner buyout financing rule in April 2018, and now offers a loan product with partner buyouts in mind – ultimately benefitting all parties involved in the transaction.

To understand why the SBA’s business partner buyout loan can be advantageous, we need to step back in time for a moment. Before the rule change in 2018, financing a partner buyout with an SBA 7(a) loan was difficult. The old SBA rule said that to qualify for a loan to buy out a partner’s interest in the business, the balance sheet must have a minimum of 10% equity based on the business’ total assets after the sale. Partner buyouts had been accomplished through a stock purchase, which would be applied to the balance sheet often resulting in negative equity. This made securing an SBA loan improbable without the buyer investing personal funds to meet the post-transaction equity requirement, an obstacle for many.

Now, a partner can qualify for an SBA 7(a) loan without an equity injection as long as the following criteria are met: 1) the buying partner has been an active partner and has held the same or higher ownership percentage for more than two years and 2) the business has a debt-to-net-worth ratio at or below nine to one at fiscal year-end and the most recent period.

How is debt-to-net worth calculated? In simplest terms, this is total liabilities divided by total equity.

Assets: $4,500,000

Debt: $2,000,000

Equity: $2,500,000

Debt-to-net worth ratio: 0.80x

In this example above, the debt-to-net-worth ratio is below nine to one, eliminating the need for an equity injection. Instead of the buyer putting down cash, they can leverage the equity of the balance sheet. This can be hugely beneficial to both the buying partner and the selling partner, as it removes one of the largest barriers in the transaction. If the previously mentioned requirements are not met, then the buying partner will have to inject 10% of the purchase price in equity to qualify for the loan.

Regardless of the reason for parting ways, no one wants a partner buyout to drag out and have negative consequences on the health of the business. Business partner buyouts are historically complicated but with the SBA’s revised rule, existing partners can purchase the business in a straightforward transaction.

There are a few things to consider when using an SBA loan for a buyout:

1) the seller cannot remain involved with the company as an owner, officer, director, or employee, and 2) if a transitional period is needed after the sale, the seller may serve as a paid consultant for up to 12 months post-sale.

Let’s consider a likely partner buyout scenario. Married couple Arthur and Elizabeth have owned and operated a successful manufacturing business for five years. The couple has decided to divorce and since Elizabeth is leaving the business operation altogether, Arthur needs a loan to purchase her share of the business. The business has $1,000,000 in assets and $325,000 in liabilities, so the debt-to-net worth ratio is 0.48. Because Arthur has been active in the business and has held the same ownership position for more than two years and his debt-to-net worth ratio is less than nine to one, Arthur can leverage the equity of the balance sheet instead of putting cash down to buy Elizabeth’s 50% share. In other words, he does not have to contribute any cash towards the loan. After mutually deciding on a purchase price and securing an SBA loan, Arthur is now the sole owner of the business and each party can move on with their life.

If you’re considering a business partner buyout and want to pursue an SBA 7(a) loan, the SBA will require a comprehensive business plan which demonstrates how the business will benefit from the transaction. These are typically considered lower-risk transactions when compared to complete changes of ownership, as the buyer is already deeply familiar with the business at hand.

Consult with your CPA or attorney to discuss all your options and determine if a partner buyout is suitable for your situation. Our experienced lending team can help you determine the best path forward for your partner buyout – from valuations to structuring the deal and ultimately, making the transition of ownership possible.

For more information about partner buyout financing, reach out to one of our loan experts today at 512-713-9855 and ask about the Business Partner Buyout Loan program.

 

The Small Business Administration (SBA) offers several commercial real estate loan options for buying or expanding property. As SBA lending experts, Live Oak Bank can help you navigate financing options for your needs. The SBA’s two popular loan programs, 7(a) and 504, each offer unique benefits for buying a business depending on the type of facility, business and funding structure needed. We break down the fundamental differences between the two programs below, and it’s always best to speak directly with a lender to discuss your own unique business goals.

 

When would I use an SBA 7(a) loan?

The SBA 7(a) loan program can be used for a wide variety of business needs – from new construction, acquisition and expansion to working capital and refinancing existing debt. A 7(a) loan would be suitable when the borrower is purchasing a business, along with commercial real estate and working capital. SBA 7(a) loans can allow for working capital and interest reserves to help cover payments between lease-up in certain project types.

Live Oak has Preferred Lender Status (PLP) with the SBA for the 7(a) loan program, which gives us authority to make final credit decisions without having to get SBA approval. This means that our borrowers receive their loan in an expedited process.

 

When would I use an SBA 504 loan?

The SBA’s 504 program can be used to finance new construction or acquisition of commercial real estate or large equipment purchases for small businesses. Working capital and interest reserves after certificate of occupancy must be covered by the borrower.

 

How does the cash flow of the business affect the commercial real estate loan?

Live Oak focuses on the cash flow of the business. When it comes to commercial real estate loans, Live Oak is much more concerned with the underlying cash flow of the business versus the value of the underlying real estate.

 

How can I determine which SBA loan program works best for me?

While independent research and education are important, We encourage you to speak with a lender like us. After discussing your goals and better understanding your business, one of our loan experts can guide you on a path to the best SBA loan program. To learn more about commercial real estate acquisition, reach out to us and get the conversation started 512-713-9855.

 

Providing a (POF) Proof of Funds letter with YOUR offer ads credibility and makes the offer stronger by letting the seller know that you are a serious investor that has done his due diligence, and has requested a Proof of funds letter to secure funds before you made the offer.

 

  • POF letters take 12 to 24HRS to process.
  • Request sent after 5 pm CST will begin after the next business day to process.
  • POF requested after 5pm CST Friday , Saturday, Sunday or a Holiday it will be process on the following business day.
  • We don’t guarantee that you will receive a POF.
  • We will evaluate proof of funds on a case by case basis if the property is within our lending criteria and a fully completed loan application is submitted. We do not provide blanket proof of funds. 

 

Why should I use a private lender?

Hard Money / Private Lenders provide investors the flexibility to borrow based on the Real Estate Asset and not look at their Debt to Income Ration like a traditional Bank does when applying for a loan.

Hard Money / Private Lenders can analyze, and fund loans much faster than traditional financing. That’s why We can close as fast as 10 days after a full loan Application, and an appraisal has been ordered and received.

How do you structure your renovation loans? What is loan-to-cost?

We can end up to 90% of the the purchase price or 75% LTV  on Fix % Flips and up to 80% LTC or Cash Out Refinance. The total cost of the project.

Do you lend to individuals?

Our loan programs are for commercial transactions only, so they are not for individuals. Our loans are for real estate investment companies.

Do you provide proof of funds?

Yes, we will evaluate and provide proof of funds on a case by case basis if the property is within our lending criteria and a fully completed loan application is submitted.

We do not provide blanket proof of funds to investors because the seller will call us to verify if we are actually funding the deal, and ask if we have done our due diligence venting the borrower, run credit, and verified that the borrower has the liquid assets to close.

 

You can request a POF letter HERE

Leverage and Loan Sizing

Initial Loan Amount: Proceeds disbursed at loan origination.

Holdback (“HB”): The construction rehab cost escrowed at loan closing, disbursed through one or more draws upon completion and reconciliation of renovation elements against project scope of work.

Total Loan Amount: Initial Loan Amount plus Holdback amount (if applicable).

Loan-to-Cost (LTC) is the initial loan amount divided by the Cost Basis

Cost Basis is calculated as the (i) purchase price, plus (ii) documented cost of improvements, plus (iii) assignment fees, less (iv) ineligible seller concessions.

Purchase price includes:

Auction fees – technology fee & buyer’s premium

Foreclosure fees – Court trustee, clerk, doc fees

Short sale fees from existing lienholder(s)

The payoff of existing lien(s)

Cost of improvements – applicable to delayed purchase refinances where post-acquisition rehab costs are documented

Assignment fees – monetary compensation in exchange for the transfer of rights in a purchase and sale agreement (PSA). A wholesaler (assignor) connects the property seller with an end buyer (assignee).

Ineligible Seller Concessions – any amount exceeding 2% of the purchase price will be subtracted from the cost basis.

The following seller credits are not treated as concessions and are exempt from the 2%

maximum:

Fees identified in purchase and sale agreement, including but not limited to buyer’s title policy, government fees, inspections, transfer taxes, sewer fees, home warranties

Realtor commissions from buyers representing themselves in the sales transaction

As Is Loan-to-Value (AIV LTV) is the initial loan amount divided by the As Is Value (AIV) of the subject property.

Eligibility for AIV loans is limited to properties with condition ratings of C1-C4.

C5-C6 properties are uninhabitable and require a rehab project for LH financing.

After Repair Loan-to-Value (ARV LTV) is the total loan amount divided by the After-Repair-Value (ARV) of the subject property.

Loan Sizing: The maximum loan that will extend to a borrower under this program is delineated in the Bridge Program Leverage Summary, subject to the following:

With Rehab and with Holdback (w/ HB in the table below):

Maximum Total Loan Amount = maximum ARV LTV%, in the table below

Holdback = rehab cost

Initial Loan Amount = minimum of (LTC% * Cost Basis), OR (max Total Loan Amount – Holdback).

With Rehab but without Holdback (w/o HB in the table below):

Maximum Total Loan Amount = maximum ARV LTV%, in the table below

Holdback = N/A

Initial Loan Amount = minimum of (LTC% * Cost Basis), or (max Total Loan Amount).

No Rehab

Maximum Total Loan Amount and Initial Loan Amount are the same = minimum of (LTC% * Cost Basis) or (AIV LTV * As-Is Value) from.

 

 

Disclosures:

By attending this website any visitor is hereby expressing and/or accepting: 

This is not a commitment or offer to lend, buy or sell any securities. This website is for informational purposes only.  Interest Rates, Fees, and other important or minor details are subject to change based on market conditions, due diligence, and input by underwriting. If your project is approved, a formal loan commitment will be issued. Time frames for each portion of the process vary due to market conditions and other factors like third parties. By visiting this website, the visitors hereby agree on behalf of the visitor’s company / business entity along with sponsors, co-sponsors, officers, and/or investors, to hold harmless Hard Money Capital Group, LLC’s investors, employees, officers, and/or third party subcontractors in the closing of any transactions. Third party reports are ordered at on a cost plus review basis. Hard Money Capital Group, LLC  can not guarantee nor influence values, or other specific important and/or minor conclusions, along with the time frames to complete third party reports. Some projects require a project feasibility, and may or may not require traffic studies or other individual reports as required by specific subject property locations and market conditions. Hard Money Capital Group, LLC  does not pay for third party reports, third party reports are billed via invoice that must be paid at presentation by the investor. Time is of the essence, and even though Hard Money Capital Group, LLC works tirelessly to maintain quick closing times, there are factors outside of the control of Hard Money Capital Group, LLC , along with other conditions, that do not always allow the projected time frames to be maintained.  Brokers and, or referral sources are protected, thus Hard Money Capital Group, LLC  honors Broker Invoices or Referral Fee Agreements that are submitted in writing. Hard Money Capital Group, LLC  only accepts new client files from brokers, if you have a further transaction, please see your introducing representative. Hard Money Capital Group, LLC uses a private source of capital, therefore your information will not be shared with the general public on any marketing information. 

Hard Money Capital Group, LLC  is a limited liability company out of the State of Texas. Hard Money Capital Group, LLC  indirectly provides funds and also brokers requests that cannot be funded in house. Hard Money Capital Group, LLC  does not operate in any state or local area whereas the laws of that state or local are prohibit cost effective operations. Hard Money Capital Group, LLC  is a private company, not open for the public. Hard Money Capital Group, LLC does its best to analyze and review all proposed transactions, but cannot possibly analyze, review, and take interest in all transactions that are presented. Rates, Fees, and other minor or important details are subject to change with or without notice. No warranties are granted, nor should be implied. 

Hard Money Capital Group, LLC  is a redeveloper company that buys and sells properties from Homeowners, real estate investors and entities that are associated with the real estate business. Hard Money Capital Group, LLC  offers Hard Money loans to investors nationwide by brokering with banks & direct lenders nationwide.

This page is intended to be used as an outline for discussion purposes only and relies upon, amongst other things, the accuracy of  the information entered by the applicant. All loan requests are subject to a full underwriting and due diligence review upon the submission of a complete loan file from the applicant, and the proposed terms and conditions may change based on the results of this review. Nothing herein represents a commitment, agreement, or obligation from Hard Money Capital Group, LLC to lend money under these or any other terms.

 The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

Protection Act.

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