An Orange County real estate investor used 12-Month Hard Money Bridge Loan In Anaheim from First Capital Trust Deeds to complete the acquisition of this rental property.
This bridge loan was another case of a self-employed real estate investor needing to use 12-month hard money bridge financing to complete an acquisition, with the intent of refinancing out of our loan after filing their income taxes.
We see this all the time with our self-employed clients who typically have significant down payment funds, but cannot obtain a conventional mortgage for various reasons. This is mostly due to their very low adjusted gross income (AGI) claimed on their personal income taxes. Many self-employed investors prefer to pay the United States Treasury (IRS) as little as possible, which is great from a tax planning perspective.
However, from a borrowing for real estate perspective through the US Treasury’s mortgage divisions, Fannie Mae and Freddie Mac, well, you gotta pay into the system through your income taxes in order to get the tax payer subsidized ultra-low mortgage interest rates that Fannie and Freddie have been providing to home buyers and real estate investors since 2009. It’s not a one way street. You gotta give a little to get a little.
This is a theme repeated numerous times in this blog. Our clients typically are self-employed, own several rental properties, flip several properties each year through multiple LLCs or self-directed accounts, and at the end of the year have insufficient AGI needed (due to numerous deductions) to qualify for a Fannie or Freddie loan.
Therefore, they come to us for a 12-month bridge loan, allowing them to acquire a discounted property quickly, and then make the necessary adjustments to their AGI with the filing of their taxes early in the new year, with the intent of taking out a conventional rental property loan on the house.
12-Month Hard Money Bridge Loan In Anaheim Terms:
- $255,000 Loan Amount
- 11.00% Interest-Only
- $2,337/Month Payment
- 12-Month Term
- No Prepayment Penalty