Smith Village Road, Silver Spring, MD 20904


The borrower is requesting a hard money loan to acquire an investment property. The property is being purchased under market value for $87,000.  This is currently a buildable lot that the Borrower will build a 2,900 sq ft home on.  We have 2 other transactions with this Borrower building the same style home.  The borrower has a tremendous amount of experience flipping properties and building homes and does many transactions on a monthly basis.  The Borrower is putting up about $27K+ of their own cash and fronting all construction costs out of pocket (~60K) .  The property needs $190K in work.  The borrower is strong with a 684 credit score, experience flipping properties and money in the bank. HMB has already done successful transactions with this Borrower.


Loan Type:    Purchase
Loan Amount:  $277,000
Value of Subject Property:     $425,000
Loan to Value:     65%
Term requested:     12 Month Balloon
Investor return:     12%
Exit Strategy:     Resell property
Closing Date: October 7, 2011
Credit Score:  684


The pros are:

The lender will have good collateral on an investment property. The borrowers have strong credit, good assets and experience. The Borrowers will be contributing about $27K+ into this deal.

The cons are:

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