A Southern California real estate investor used a 36-month cash-out hard money loan against their rental property in Wilmington.
First Capital Trust Deeds works with several real estate investors in California. These investors have been buying distressed properties for long-term investments. Often what happens is that the property is purchased using expensive hard money financing, and after making repairs and securing a tenant, the owner needs to get out of the 12.00% hard money loan and into a longer term loan with a lower monthly payment. That way the rental income will service the debt. On top of that, they’d like a little cash in their pocket which leads to a new cash-out hard money loan.
This was the case for the owner of this rental house in Wilmington, California, who bought the property as a short sale. After making some repairs and placing a tenant on a 24-month lease, the owner needed to get longer term financing to make the property perform. Moreover while they were in the process of refinancing, they wanted to get some additional cash out for a down payment on another investment property to either fix and flip or for buy and hold.
Cash-Out Hard Money Loan Terms:
- $220,000 Loan Amount (58% Loan-to-Value)
- 8.50% Interest-Only
- 36-Month Term
- 1-Year Prepayment Penalty