Cash-Only “AS-IS” Listing Acquired Using Hard Money Financing

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Cash-Only “AS-IS” Listing Acquired Using Hard Money Financing

A Los Angeles real estate investor used hard money financing to acquire this “Cash Offers Only” property in San Bernardino County. Many of our repeat house flipping clients come to us when they need financing to buy an “All Cash Offers Only” listing.

Question: Why is it listed as “All Cash Offers Only” anyway?

Answer:  Usually, the home does not qualify for conventional financing due to lack of heat source or other defects to the house that knock it out of the Fannie Mae, Freddie Mac, FHA, or VA loan programs. Often times, the former owners stripped have the house of copper, wiring, plumbing, kitchens, bathrooms, etc. in order to get some money out of the house before eventually walking away.

Even though conventional lenders wouldn’t finance this loan, hard money lenders will fund it all day long. And that’s what happened here as the hard money lender agreed to do an 84% Loan-to-Value (LTV) loan on the purchase of this house, which not only needed a new heat source, but also needed a cosmetic makeover to appeal to a new buyer coming in with conventional financing.

Hard Money Financing Terms:

  • $104,000  Loan Amount (84% LTV of Purchase/55% of After Repaired Value (ARV))
  • 12.00% Interest-Only
  • $1,040/Month Payment
  • 12-Month Term
  • No Prepayment Penalty
Do you have a similar financing scenario?
Inquire about your financing options with FCTD.