Nearly 100% Cash-On-Cash Return Using Fix and Flip Financing

Nearly 100% Cash-On-Cash Return Using Fix and Flip Financing

A Los Angeles real estate investor used a hard money fix and flip financing loan to realize nearly a 100% cash-on-cash return within four months.

It’s great to see when our hard money fix and flip financing clients make a big score on their projects like this one where the investor nearly doubled their cash-on-cash funds in just four months.  Home runs aren’t always the norm, but they can and do happen from time to time in the highly competitive California house flipping business.

“Buying it right” was the key to this success story as it is in nearly every successful fix and flip project.

As for our part in this transaction, we sourced the 85% Loan-To-Value (LTV) private money financing for the purchase from a Los Angeles based private money fund. The lender saw that the purchase price was well below the as-is value, which made going to a $205,000 loan amount, or 85% LTV, an easy decision to make.

Taking it one step further, because new potential clients always ask us how much of the after repair value (ARV) we can get them on their next project, the lender calculated that their loan of $205,000 would be less than 50% ARV. This left significant protective equity in the project for the lender.

Both the real estate investor and the trust deed investor did very well on this transaction. The big profits went to the real estate investor, as it should, since they did all the legwork finding the property, buying at a discount, and then renovating the property quickly. The lender made their 11.00% yield and will be able to redeploy the funds to another project.

85% LTV Fix and Flip Financing Terms:

  • $205,000 Loan Amount
  • 11.00% Interest-Only
  • $1,879/Month Payment
  • 12-Month Term
  • No Prepayment Penalty
Do you have a similar financing scenario?
Inquire about your financing options with FCTD.