First Capital Trust Deeds provided a northern California real estate investor with a multi-property private money loan for rental portfolio consisting of twelve freestanding homes.
This investor started buying distressed properties at the bottom of the market in 2009 and had accumulated a substantial rental portfolio. Each of the properties was encumbered with higher cost hard money loans at 4 points and 12.00%. This included many that were coming due within the next six months. The owner wanted to cash-out some of the equity in the properties and also lock in lower interest rate financing for at least the next five years.
Our first recommendation was to pursue regional bank or credit union financing. In the past couple of years, we worked with several real estate investors who had obtained an institutional blanket loan against their property portfolio. The big drawback going the bank or credit union route is the massive paperwork requirements, which can become a full-time job for many borrowers. We’ve seen several instances where everyone has put in several months of fulfilling the underwriting requirements, only to have a board member of a community bank or credit union deny the loan during the Friday loan committee meeting.
Our client didn’t want to invest all that time and energy into a loan that at best had a 50/50 chance of succeeding.
First Capital Trust Deeds arranged a 5-year multi-property private money loan at 8.00% interest-only for the investor. This loan could close quickly (15-21 days) and didn’t require the large time commitment from the client, who was actively buying rentals and flipping houses each month.
Blanket Loan Terms:
- $678,000 Loan Amount – 62% LTV
- 8.00% Interest-Only
- 5-Year Term
- 3, 2, 1 Prepayment Penalty Over the First 3 Years