PROPERTY:

Railroad Ave, Pasadena, MD 21122

LOAN OVERVIEW:

The borrower is requesting a hard money loan to refinance a free and clear investment property. The property was purchased in cash for $150,000 and needs rehab work (around $25,000 to replace carpet, kitchen and bathroom upgrades, paint and landscaping).  The property is worth $150K as is and $200K after rehabbed.  HMB is doing a full construction hold back for all construction costs and only reimbursing on completed work.

PROPOSED TERMS:

Loan Type: Purchase
Loan Amount: $75,000 1st Mortgage
Value of Subject Property: $ 200,000
Loan to Value: 38%
Term requested: 9 Month Balloon
Investor return: 12%
Exit Strategy: Resell property
Credit Score low


HARD MONEY BANKERS COMMENTS:

The pros are:

The lender will have good collateral on an investment property at a 50% ltv based off the “as is” value and 38% based off the ARV.

The cons are:

The Borrowers exit strategy of selling could take longer than expected in this market.