The real investor wanted to maximize the leverage on this acquisition in Woodland Hills using the highest loan-to-value (LTV) hard money fix & flip financing available.
First Capital Trust Deeds secured a 12-month purchase money hard money loan at 85% LTV for the buyer through a Southern California trust deed investor (lender) who had issued several loans in the neighborhood over the years.
The buyer benefited by getting the maximum leverage through the loan and then brought in an equity investor/partner who provided down payment and renovation funds. Some refer to it as an equity partner while others refer to it as gap funding. Either way, the equity partner/gap funder put money in to make the project work for our borrower.
The trust deed investor at $680,000 was okay with this structure between the borrower and their equity partner since the lender felt secure at 85% of purchase price, which was closer to 75% of as-is value.
Los Angeles 85% LTV Fix and Flip Financing Terms:
- $680,000 Loan Amount (85% LTV)
- 11.00% Interest-Only
- 12-Month Term
- No Prepayment Penalty