Case StudyForeclosure Auction Refinance System
Loan Amount: $135,000
Loan-To-Value: 80% LTV
Situation & Challenge
The client had bought several properties at foreclosure auction, sometimes paying cash and other times financing the purchase. Financing auction purchases on the day of the auction was expensive with pricing at 4 Points and 12.00% up to 65% LTV on a 6-month term. The client needed financing that was less expensive.
Solution & Result
First Capital Trust Deeds worked with a lender that would refinance the auction purchases at 80% LTV at more competitive terms coming in at 2 Points origination fee and 9.00% on a 12-month term. FCTD also used a title insurance company that would insure the property with the receipt from the Trustee’s Sale rather than waiting for the Trustee’s Deed to arrive in the mail three weeks later.
This arrangement with the lender and title company allowed the client to pay cash the day of the auction and cash-out 80% LTV, closing within eight days. The investor was able to buy more properties to flip during the year with this system in place.