Featured LoanTitle of Case Study
Loan Amount: $2,000,000
Loan-To-Value: 77% LTV
First Capital Trust Deeds funded a 77% LTV loan for an investor during COVID-19 providing hard money fix & flip financing with $300,000 rehab funds to transform an outdated home in Southern California.
This loan was slated to fund in mid-March, but the fix & flip lender doing the original financing froze all originations when stay at home orders were issued in California. At that time, fix & flip lenders that sold their loans into the secondary mortgage market, received word from their buyers that all acquisitions of loans were suspended indefinitely.
FCTD worked with the borrower and a new lender that originated and held fix & flip loans in their portfolio. The results were a 77% LTV purchase loan with 100% rehab financing, which at the outset of the COVID-19 economy, was an excellent loan in terms of leverage at 77/100. Most fix & flip lenders had reduced their Loan-To-Value (LTV) down from 80% to 65-70% on acquisitions.
We believe the benefit that real estate investors have by working with FCTD is that we have an extensive lender database to draw upon for every hard money financing scenario that comes across our desk. The company has spent a lot of money over the years on technology and making sure we know what our lenders like to fund. In a tough lending environment like we have now in COVID-19, our database will be a strength to help our real estate investor borrower clients obtain financing for their current and future projects.