A California real estate investor used hard money fix and flip financing plus outside gap funding to buy a fixer upper in a highly desirable location of Sierra Madre.
The big challenge here was obtaining Gap Funding. First Capital Trust Deeds doesn’t originate gap funding loans on flips but we had referred them out to a fund that invests in projects with investors.
For a gap funding investor to put money into a project, they want to see a strong track record of successful flips along with a high probability of making a large return on investment on this particular project. Our borrower for this Sierra Madre property had a five year track record of successfully flipping 4-5 houses each year that resold in the $1-1.5 million price range.
Hard Money Fix and Flip Financing Terms:
- $410,000 First Loan Amount
- 10.99% Interest-Only
- 12-Month Term
- No Prepayment Penalty
- GAP FUNDING: $300,000 — 12.00% — 12 Month Term — $3,000/Month