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
HARD MONEY BANKERS COMMENTS:
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.