The real estate investor did an excellent job sourcing the property and buying well below the as-is value which allowed the lender to issue an 84% LTV purchase money first trust deed.
When buyers do a great job getting the property well below market value, or as-is value mentioned above, hard money lenders can increase the LTV on the purchase. First Capital Trust Deeds worked with a Southern California trust deed investor whose base LTV on a fix and flip loan or 12-month bridge loan is 75% of as-is value.
However, when real estate investors or house flippers like this client negotiate a great discount on the purchase price, the lender will lend up to 93% of the purchase as long as it doesn’t exceed the 75% of as-is value.
84% LTV Hard Money Fix and Flip Loan Terms:
- $380,000 Loan Amount
- 12-Month Term
- No Prepayment Penalty