Addison Road, Capitol Heights, MD 20713
Bock Road, Fort Washington, MD 20744


The borrowers are requesting a hard money loan to acquire an investment property. The property is being purchased under market value as a bank owned property for $69,000 and needs rehab plus an addition (total $89,000 to replace flooring, kitchen and bathroom upgrades, paint and landscaping). The borrowers are putting  up additional collateral by allowing us to put a lien in 1st position on a free and clear property they purchased for $250K cash.  We are currently valuing that property at $175K “as is” to be safe.  HMB is holding the full $89K in a construction reserve which will only be reimbursed on completed work.


Loan Type: Purchase
Loan Amount: $192,000 1st Mortgage
Value of Subject Property: $375K ARV, $245K As Is
Loan to Value: 52% ARV, 42% As Is
Term requested: 9 Month Balloon
Investor return: 12%
Exit Strategy: Refinance
Credit Score 762


The pros are:

The lender will have good collateral on two investment properties. One of the investment properties is currently free and clear with tenants paying $1,800 per month.

The cons are:

The Borrowers exit strategy of refinancing might take longer than expected in this market.