First Capital Trust Deeds recently closed on an 88% LTV hard money loan in the state of Washington for a highly experienced house flipper that did an excellent job sourcing the REO at a healthy discount off present as-is value.
As a general rule of thumb with hard money fix and flip loans, we start with 75% to 80% Loan-to-Value (LTV) against the purchase price. Assuming that purchase price and as-is value are the same. However, in cases like this, where the as-is value is much higher than the purchase price, we are able to go up to 88% LTV without putting much thought into the decision.
The other compensating factor that led to the loan being 88% LTV is that the buyer has successfully flipped several dozen homes in the past 5-6 years. So the risk of default or a potential loan loss was nearly nonexistent in the eyes of the lender.
Doing maximum leverage hard money fix and flip loans can be pretty easy, as long as the right ingredients are in the mix. Well sourced properties under contract with experienced house flippers can usually obtain 85-90% LTV financing in California, Oregon, and Washington.
Terms for 88% LTV Hard Money Loan in Washington:
- $228,000 – 88% LTV
- 11.00% Interest-Only
- 12-Month Term
- No Prepayment Penalty