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 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|
HARD MONEY BANKERS COMMENTS:
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.