Case StudyHawaii Vacation Rental Bridge Loan
Loan Amount: $180,000
Loan-To-Value: 60% LTV
Term: 12 Months
Situation & Challenge
The buyer of this vacation rental in Hawaii had their conventional financing denied one week before the scheduled close of escrow with an all-cash offer in second position. Since the buyers were self-employed with several residential investment properties, their Adjusted Gross Income (AGI) was too low after backing out all the interest and depreciation across their real estate portfolio.
The challenge was to close within one week using a private money financing through a lender that take the existing appraisal.
Solution & Result
First Capital worked with a local trust deed investor who reviewed the appraisal for conventional lender and met with the buyers agent for a site inspection. Some lenders can be picky about appraisals, but FCTD had the right trust deed investor who would review the appraisal and walk the property.
The loan closed one day ahead of the scheduled close of escrow. The borrowers held the loan for seven months, refinancing into a conventional loan after filing income taxes.