This property is an entry level residential home in the Stockton area. It was purchased for below market value with rehab work needed to give it some curb appeal and modernize the interior. Our client on this transaction has a history of successful rehab projects, and typically has the rehab completed and property back on the market in a matter of a couple of months.
Most of the work done on this property was cosmetic – the exterior was painted to give it more curb appeal. In addition, the kitchen and flooring was redone to give it a more modern look. The hard money loan for this transaction included interest reserves to make payments while the work was being done as well as a fund control account to fund the rehab work needed.
These rehab loans are short term, this one was for 12 months, with no prepayment penalty. We expect this loan to be paid off well before the twelve month mark, and the client will be refunded any unused interest reserves that remain should the property be sold before they are used. In addition, we required no appraisal on this transaction, instead sending the investors to the property for a site visit to view the subject property and comps to support our after repair value.
This transaction is one of many we have successfully funded for our client, and as his real estate investing experience grows we look forward to continuing to fund his rehab transactions. Visit our rehab lending page for more information on how we can help fund your fix and flip transactions.