First Capital Trust Deeds closed a last minute San Diego hard money fix and flip loan for house flipper whose previous financing fell through 48 hours before the scheduled close of escrow on a Bank of America short sale.
This San Diego hard money fix and flip loan was one of those miracle loans that only happen a couple times a year. The one where everyone drops what they’re doing to make sure a last minute loan submission gets closed on-time.
Here’s the scenario:
The buyer’s agent called on a Wednesday afternoon asking if we could do a 90% LTV fix and flip hard money loan for their buyer on a San Diego short sale. A short sale which was scheduled to close within 48 hours at the end of business on Friday afternoon. Prior to coming to FCTD, the buyer and the agent had been working with a hard money broker who kept saying that docs would be sent to escrow any moment, but the loan docs never surfaced. This went on for several weeks. This led to the buyers needing to obtain an additional three week extension and 48 hours before the close of escrow calling FCTD to see if we could help them close the sale.
The seller’s lender was Bank of America, which processes distressed sales through a system called Equator. Every agent who has used Equator detests it because it’s the Grand Canyon of data entry for agents. There’s a ton of stuff that has to be input into Equator and your file is placed in line in the order received. There’s no making a call to a bank asset manager and asking for a two day extension when you’re using Equator. Agents put their request in and hope to get a response from the asset manager someday soon.
(Equator is great for data management at the bank level but it becomes a part-time job for realtors who often hire someone to deal with Equator because it’s so time consuming).
That being said, there wouldn’t be a two-day extension coming our way. Nor, would we be able to get Bank of America to approve the estimated HUD closing statement on an 80% or 85% LTV loan rather than the 90% financing that had already been approved for this transaction.
What we had in front of us is what we had to work with to make this transaction happen, which by the way, was going to be a profitable flip for the buyer after they completed the renovations and resold the property within the next 3-5 months.
FCTD sent this to a Los Angeles-based private money trust deed investor who could grudgingly go to 90% LTV, have loan docs ready the next morning (Thursday), and could fund the loan on Friday morning after driving down to San Diego for an interior/exterior site inspection.
The buyer’s agent met the lender at the property at 7:30 Friday morning for five minutes and dropped off the signed loan docs. After walking the property and reviewing the docs, the lender called back to the office to authorize the wire for funding.
48-hour closings aren’t the norm but in special cases we can get them closed, which makes our borrowers and their Realtors very happy!
San Diego Hard Money Fix and Flip Loan Terms:
- $193,500 Loan Amount (90% LTV)
- 11.00% Interest-Only
- 12-Month Term
- No Prepayment Penalty
- Closed in less than 48 hours