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.