This San Bernardino hard money rehab loan was for the purchase and rehab of an upscale single family residence in Rancho Cucamonga. The purchase price of this property was $492,500, with rehab costs of $79,000 and an estimated after repair value of $820,000.
Our hard money rehab loan was made for a total of $535,000. Included in the loan was six months of interest payments (so the borrower had no payments due out of pocket for the first six months) and $79,000 in fund control for the work to be done. The fund control was set up to be released in three draws with the initial draw coming immediately after funding to get the work started. The next draw would advance more funds to continue the work upon receipt of pictures and an overview of the work progress.
The benefits to this fund control on our rehab loans is great. While many other lenders require work to be done in advance, with fund control releases coming to reimburse for the work done, our fund control allows for advances which reduces or eliminates out of pocket costs once the loan has funded (unless you have overruns of course). In addition, the ease of access means a project that gets finished more quickly. Finishing a project more quickly means less holding costs and more profits. Finally, removing the need for inspections (for most rehab deals) means no hidden inspection fees after the close of escrow and no delays due to scheduling conflicts with the inspector for the builders control.
We can help with rehab loans all over the state of California. We can typically help secure funding of up to 65% of the ARV or after repair value, and our loan amounts are not capped out at a percentage of the purchase price (so loans greater than the purchase price are not uncommon). In addition we have other programs for real estate investors looking to fix and flip. Take a look at our California rehab loans page for more details on how we can help you.