N. Locust, Hagerstown, MD 21740
The borrower is requesting a hard money loan to refinance an 8 Unit property he owns free and clear. The property was purchased in cash in 2010 for $230,000. He renovated the majority of the property at that time and kept the existing tenants in place while renewing their leases. The cash out will be used to purchase another investment property and do minor repairs on this subject property. The subject property is currently on the market for $350,000 to be sold. It is overpriced at this time but he is aware the value is in the mid $200’s. Its currently rented out for $5,400 per month.
|Loan Amount:||$110,000 1st Mortgage|
|Value of Subject Property:||$240,000|
|Loan to Value:||46%|
|Term requested:||12 Month Balloon|
|Exit Strategy:||Resell property|
HARD MONEY BANKERS COMMENTS:
The pros are:
The lender will have good collateral on an investment property that is currently rented for $5,400 per month. The property was purchased in cash for $230K in 2010.
The cons are:
The Borrowers exit strategy of selling could take longer than expected in this market.