A Real Estate Investor purchases property that is in need of repair for a discounted price, invests additional funds to repair and/or improve it. The repair is done by the investor or contractors. Once completed the investor has a couple of choices, first sell the property at a profit, second is a cash-out refinance and make it a rental property. This process is referred to as flipping properties.

Flipping property has one major draw back – how does the investor acquire the property with little or no out of pocket cash. After all, the optimum way to increase your asset base is to increase your portfolio without using existing funds. 4R Management has the answer – HML/Rehab Loan.

 HML/Rehab Loan Overview:

The program provides 65% of After Repair Value (ARV) which includes sale price, repair costs, and, if structured properly, all loan fees. No down payment is required. This equates to little or no money out of pocket expense. Your money continues to work for you.

Program Basics:

·         Loan Range: Loans range from $30,000 to $1,000,000

·         Loan Amount: 100% of the sale price and repair funds, not exceeding 65% of ARV (after repair value)

·         Maximum term: Six (6) months

·         Payments: Interest only payments monthly

·         Pre-payment penalty: None

·         Pre-Approval: Three business days once all required documentation is received

·         Closing Time: Less than 15 business days once all required documentation is received

·         Closing Costs: If purchase and repair costs are below 65% of the ARV, the closing costs can be wrapped in into the loan.

·         Seller’s concessions/assists: May be used to finance the closing costs, as long as the loan does not exceed 65% ARV purchase and repair costs are below 65% of the ARV, the closing costs can be wrapped in into the loan.

·         Repair funds: Placed in escrow account. The escrow repair funds are paid to the rehabber on a reimbursement basis. The rehabber pays for materials and labor then presents the receipts and/or lien waivers as required. Appointments for inspection must be made at least three days in advance. Copies of the receipts and/or lien waivers must be provided at the time of the reimbursement.

·         Restrictions: Non-Owner Occupied property only. Rehabbers are not permitted to live in a mortgaged property. The property must be purchased for the sole purpose of renovation and selling or refinancing it.

·         Benefits: Property is purchased quickly and easily, with minimum out of pocket expense, allowing financial flexibility during property renovation.

Program Descriptions:

• Monthly Payment Plan - Required credit score: >620

Pre-Qualify:

If you are a new or a well seasoned investor, it makes sense to pre-qualify for one a Rehab/HML loan.  Upon approval, the investor receives a 'Proof of Funds" commitment letter to assist in making offers on rehab projects.  Click Here to request an application.