Why hard Money Loans With RezCap Funding?
At the first glance “hard money loans” aka “private lending” aka “fix and flip” lending seems expensive. Guess what? It is expensive. Typically, the borrower pays 5 points on the entire amount borrowed and upwards of 14% interest. Why would anyone do this? Because “expensive” is a relative term specially when Return on Investment is considered and a multitude of reasons which we have outlined below. These are the same reasons that professional property flippers on HGTV use hard money lending.
Leverage and Liquidity
Traditional bank loans used for the acquisition and renovation of real estate require a significant investment and have much tighter lending requirements compared to hard money loans.
ROI
Most real estate investors who focus on “flip and fix” are primary concerned with ROI or Return on Investment.
Speed and Eficiency
Private lenders typically specialize in “fix and flip” lending whereas traditional banks often times want nothing to do with “fix and flip” lending.
Non-Bank Underwriting
Traditionally banks require a credit profile that meets a certain box. They requirements can includes a large amount of liquid reserves, 700+ credit scores, several years of successful “fix and flip” experience.
RezCap Funding Loan Approval Process
Below is a brief overview of the process by which a loan is approved once we embark on a new project. From application to closing, our team understands the importance of timely and accurate communication. We work diligently to ensure that our clients are kept abreast of important updates and milestones as we navigate the loan approval process.
Submit Application
The loan is made in the name of the LLC (business purpose) and is guaranteed by the members of the LLC. The members submit an application directly with Rezcap Funding.
Loan Underwriting
Underwriting is a project based decision process whereby the strength of the real estate and the guarantors is analyzed. From submission to decision, usually takes only 24 hours.
Decision & Pre-Closing
Once an underwriting approval is issued, we work with clients and third parties to ensure that all conditions are satisfied including title work, home owners insurance, etc.
Closing
Once all underwriting conditions have been cleared, our closing department with work directly with a settlement agent to create a settlement statement and all relevant documents to be signed by the guarantor(s) at closing.
Who We Work With
Real Estate Investors
We lend money to seasoned real estate investors who acquire, renovate, sell/rent, or management real estate. We also lend money to first time investors and provide hands on assistance during the process.
Mortgage Loan Officers
Residential mortgage loan officers partner with Rezcap Funding to provide their clients with private lending solutions. Often times, loan officers don’t have access to such programs through their employer.
Commercial Loan Officers
We work with a multitude of Commercial Loan Officers who work for financial institutions or banks who do not specialize in small balance and short duration real estate lending.
Rehabbers
Throughout the years we have helped turn contractors into real estate investors. In fact, our top performing clients are owner operators who are actively involved in renovation.
Landlords
Rezcap Funding is a DSCR (Debt Service Coverage) leader and we have access to private capital and investors from around the globe.
Wholesalers
Our private money product allows for wholesale transactions for real estate investors who engage in property wholesale flips.
Loan Programs
Our business purpose loans include renovation loans, acquisition financing, and DSCR loans.
Loan Application
For new applicants, please contact us to schedule a time to speak, via a phone call, so that we can learn about you and help understand how best we can serve your needs.
Recent Transactions
Project 4
Beach House in New Symrna Beach, FL
- Scope:Beach House in New Symrna Beach, FL
- Acquisition Cost:$295,000
- Renovation Amount:$225,000
- ARV:$700,000
- RezCap Funding Loan Amount:$468,000 (90% of the acquisition cost and 100% of the renovation cost)
Project 3
Four Family Building in Columbia, MO
- Scope:4 Family Building in Columbia, MO
- Acquisition Cost:$215,000
- Renovation Amount:$75,000
- ARV:$365,000
- RezCap Funding Loan Amount:$268,500 (90% of the Acquisition Cost plus 100% of the Renovation Cost)
Project 2
Two Family Building in St. Louis City
- Scope:SFR in St. Louis City
- Acquisition Cost:$47,500
- Renovation Amount:$142,970
- ARV:$235,000
- RezCap Funding Loan Amount:$183,300 (79% of ARV)
Frequently Asked Questions
Of course! In fact, most of our business comes from third party referrals. We also have a program by which we pay referral fees for projects that succeed. Many loan officers don’t have access to private money and so Rezcap Funding provides our loan officer partners with a value add.
We lend on residential 1-4 family properties and entertain 5-10 unit multi families for long tenured real estate professionals and existing clients. We do not lend on manufactured homes, land, mobile homes, or property not deeded “fee simple”. Condo’s are available only on DSCR.
Depending on the situational specifics, it might not be. Conventional loans, for high credit score borrowers that can qualify based on traditional income guidelines, may realize better loan terms than a DSCR loan. But because it appears on the borrowers personal credit report, borrowers often pay a premium in rate to avoid Conventional financing. Rezcap Funding will provide both options.
Yes. DSCR and Private Hard Money loans typically have a min credit score of 620. We will review compensating factors such as mortgage payment history, homeownership history, liquid reserves, etc.