Los Angeles real estate investors acquire a Redondo Beach fixer upper using 85% LTV Hard Money Fix and Flip Financing from First Capital Trust Deeds.
The active South Bay real estate investor wanted to strike quickly on this distressed property located a couple blocks from the sand in Redondo Beach. The borrowers, who had 5-6 other projects in some phase of remodeling, wanted to keep as much cash on hand for renovations rather than tie up cash on a large down payment.
Since the investors had a successful track record of buying and selling properties in Los Angeles and Orange counties, we were able to secure a 85% LTV hard money fix and flip financing on the purchase. This allowed the buyers the opportunity use their cash on the top to bottom renovation in order to maximize the resale value and increase their cash-on-cash return on investment.
First Capital Trust Deeds placed the loan with a Southern California private mortgage investment fund that knew the track record of the borrowers, factored in the discounted purchase price off as-is value, and calculated the after repair value (ARV) to make their 85% purchase money loan have about a 60% ARV. Being at just 60% ARV works for hard money lenders. 65% ARV is usually the maximum leverage level the lenders we work with feel comfortable. Anything above that is a bit too risky for most hard money lender’s preference.
85% LTV Hard Money Fix and Flip Financing Terms:
- $700,000 Loan Amount (85% LTV)
- 11.00% Interest-Only
- 12-Month Term
- No Prepayment Penalty