In our business of originating private money loans for residential real estate investors, we like to give our clients various pricing options dependent on their preferences. For the buyer of this property in the Palm Springs desert, we offered a couple scenarios that led to the borrower going with fix and flip financing at one point origination fee to acquire the home.
One of the private money funds that we originate a high volume of loans with each month gives us the flexibility to price loans with 1 or 2 point origination fees. When we go with 1 point origination, like in this case, the interest rate comes in at 11.00% with the lender taking 1 point at origination and First Capital Trust Deeds getting paid by the loan servicer each month on the monthly payment stream. When a borrower chooses 2 points at 9.99%, FCTD as broker and our lender get 1 point each at origination.
Fix and Flip Financing Terms:
- $215,000 Loan Amount (78% LTV)
- 11.00% Interest-Only
- 12-Month Term
- No Prepayment Penalty