Hard Money Loan at 7% Rate
With rates as low as 7% and / or points are as low as 1% this is the lowest cost hard money or fix and flip loan on the market. This hard money loan is for Residential, Multifamily and certain Mixed Use properties. Experienced real estate investors with great credit and liquidity can qualify for the lowest rate and or the lowest points in the market. Of course rates and points are based on risk. The clients with the lowest risk get the lowest rates. The criteria we use to determine the lowest risk in this program are experience; credit with liquidity and net worth a compensating factors. I will explain criteria and benefits of the best program for real estate investors.
Real Estate Investor Experience
Experience is determined by the number of investment properties you have purchased, rehabbed and sold or held for rental income in a defined time period. Most hard money programs only review the last two to three years. This program has a five year review period. I talk to many investors who are contractors or realtors or those who have many years of related real estate, construction, renovation or similar experience. Their industry experience is helpful for their success and can be used as a compensating factor in some programs, but it does not meet the experience requirements if there was no ownership. There are 3 tiers based on experience they are: Novice with 0-2 projects, Professional with 3-15 projects and Elite with 16+ projects. Again this is over a five year look back period.
Experience not only equals the flips you have done in the five year period, for this program experience equals the number of rentals you currently have and those you have purchased and sold during the the five year look back. This would then reflect not only your rate but, also your exposure limit. Exposure limit is the outstanding balance of mortgages you have in this program. You may be eligible for a ten million dollar credit limit based on experience, credit, liquid assets and net worth.
Real Estate Investor Credit
Yes credit is important if you want the lowest rates. For this program the minimum credit score is 620. You will not get a 7% rate or even an 8% rate with a 620 credit score. There are 3 credit score levels: Level 1 720+, Level 2 680 – 719 and Level 3 620-679. Of course the best rates are reserved for clients with the highest credit scores. The good thing is they will only pull credit report once and all projects done over the next year will be without a new score (unless you request a review because you believe your profile is better). So the Real Estate Investor with 16 completed projects (Elite) and a credit score of 720+ (Level 1) will be on track for the 7% rate.
Real Estate Investor Liquid Assets
Liquid Assets are simply defined as Cash or cash like accounts which include: Checking, Savings, Money Market, CD, Roth IRAs/Non-Retirement Stocks/Bonds/Mutual Funds. Equity in property that we will provide cash out refinance is acceptable. Secured loans and credit lines are only acceptable when funds are withdrawn and deposited in the bank. There is a 60 day seasoning requirement and any large deposits will need to be sourced. A large deposit is considered 25% or more of the previous balance. The minimum liquidity for this hard money program is $50,000.
Real Estate Investor Net Worth
Net Worth is simply assets minus liabilities. To be considered for Credit Line exposure limits greater than $4,000,000 and investor must have a net worth of at least 30% of the credit line. For example, if an investor wants a $5,000,000 credit line they must have a net worth of at least $1,500,000. If an investor wants a $2,000,000 credit line there net worth is not reviewed.
Low Rate Low Point Hard Money Loan
If you are a residential or commercial real estate investor with good credit and liquid assets of $50,000 or more, whether you are a Novice, Professional or Elite Investor you may qualify for the lowest rates and lowest points on any hard money loan in the market.
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