Pre-Approval

• Submit Required Information

Since HML/Rehab loans are based on credit, 4R Management requires information to process approval. Information should be submitted via facsimile at 708.575.1478 

• Initial Processing Fee

There is an initial application processing fee

• Letter of Commitment

Upon approval, a letter of committed funds will be issued

• Check List

View Pre-Approval Information Check List

Purchase Offer

• Area Comps

To establish an after repair value (ARV) secure comparables from the Multiple Listing Service (MLS) for 3 to 4 comparable sold area properties.

• Repair List

Prepare a complete list of planned property repairs.  Remember, you want to make the property “livable”, not Buckingham Palace.

• Calculate Purchase Price

Prior to making an offer, ensure the project fits the paradigm.  Optimally, you want to include points and closing fees into your loan.

• Purchase Agreement

Secure signed purchase agreement from the seller

• Submit Deal

Send area comps, repair list, and purchase agreement to 4R Management via email or facsimile (708.575.1478)

Closing Process

• Appraisal

A State Licensed, HUD approved appraiser will be assigned to complete the appraisal denoting the "as is" and "after repair value".  Appraisal costs vary, but generally are in the $300 to $400 range.

• Inspection

After the appraisal, a State Licensed inspector will be assigned.  The inspector will review the repair list to ensure the repairs will bring the property within local building codes, and is livable.  This inspector will be used for all draw inspections during the rehab process.

• Insurance

Obtain a 12 month term Hazard (Home Owners) property insurance policy

• Corporate Documentation

If the deed is to be in the name of a corporation, or similar entity, you must provide a copy of the enabling documents and the corporate seal at the time of closing

• Check List

View Closing Process Check List

Funds Transfer

• Purchase

Funds are transferred for the entire sale price of the project

Any down payments are returned to you

• Rehab Escrow

Rehab funds are transferred into an escrow account

• Points & Closing Fees

If these fees are calculated in the loan they will be paid, if not you will be required to pay them during the closing process

Implement Exit Strategy

Select one of the following exit strategies

• Seller Financing

• Lease Purchase
• Refinance non-owner occupied
• Refinance owner occupied

Rehab Process

• Manage and Complete Rehab Work
• Receive Escrow Payments
• Upon completion of a task, or entire project schedule a draw inspection
• Submit signed inspection form and receipts for reimbursement
• Remaining funds in the escrow account will be used to pay off loan

Property Flip

• Sell the property
• Create a Lease Purchase Agreement
• Convert the property to income producing

Loan Payoff

• Target loan payoff at 90 days
• Use proceeds form exit strategies to satisfy loan