SECURED LOAN<\/span><\/strong><\/p>\nRefi and construction of SFR Ridgefield, WA, with additional industrial zoned land as cross collateral.<\/p>\n
Loan Details<\/span><\/strong><\/p>\n\n- Loan Amount: $262,000<\/li>\n
- Term: 24 Months<\/li>\n
- Interest Rate: 12%<\/li>\n
- Monthly Payments: $2,620 \u00a0Interest Only<\/li>\n
- Security:\u00a0 \u00a0Deed of Trust in 1st Position security interest in real property at XXX, WA<\/li>\n
- Construction Holdback:\u00a0 $98,903<\/li>\n
- Cash out to pay extension fee on existing land loan:\u00a0 $13,000<\/li>\n
- Projected Value by lowest $\/SF on BPO:\u00a0 $416,926<\/li>\n
- Projected LTV based on BPO:\u00a0 63%<\/li>\n<\/ol>\n
\n- Additional Collateral security:\u00a0\u00a0 Deed of Trust in 3rd<\/sup> Position in real property at YYY, WA<\/li>\n<\/ol>\n
11.\u00a0 As-Is Value of Additional Collateral based on BPO:\u00a0 $550,000<\/p>\n
\n- Current liens on Additional Collateral:\u00a0 approx. $300,000<\/li>\n<\/ol>\n
NOTE \u2013 the Additional Collateral does strengthen the loan as there is additional security, but has not been used in any LTV calculations.<\/p>\n
Loan Overview<\/span><\/strong><\/p>\n <\/strong><\/p>\nXXX currently owns the subject property held by his company, YYY, LLC.\u00a0 This property is over 100 years old, and has been in XXX\u2019s family the entire time.\u00a0 After falling on hard times and losing the property in a foreclosure in 2011, XXX re-acquired this property in February of 2012 with a purchase loan through Fairfield.\u00a0 The purchase price was $170,000 and after closing costs and all other fees, XXX made a down payment of approximately $74,000 to purchase the property.\u00a0 The principal balance of the loan is currently $125,000<\/p>\n
Currently, XXX is requesting funds to refi the existing loan and an additional $99,000 to be held in a construction holdback account for the expansion and updates to the house.\u00a0 The construction funds will be used to add 1,300 square feet of living space, a new upstairs bathroom, grandmother\u2019s quarters, full wrap around porch, and 2 a car garage.\u00a0 A line item budget has been provided for the proposed work.<\/p>\n
In addition, he is also requesting $13,000 to be used to pay the extension fees on an existing land loan for a property that XXX owns with his father.\u00a0 The land has a current 1st<\/sup> of $150,000, as well as an IRS lien for $150,000.\u00a0 It has been reported that the IRS lien is inaccurate, and will be reduced to somewhere in the range of $8,000 to $20,000.\u00a0 A representative of the IRS has signed a statement from the borrower saying that this is accurate (the IRS representative was unable to write the letter herself \u2013 but agreed to sign it if it was prepared by the borrower and accurate).\u00a0 Ultimately, the combined 1st<\/sup> and 2nd<\/sup> on this land should be no more than $170,000.\u00a0 To strengthen the loan (and to compensate for the cash out), this property can be used as additional cross collateral for the loan, and is valued by a BPO at $550,000.<\/p>\nXXX\u2019s pay history for the past 18 months has been solid, (with the exception of a payment in January 2013 that was 2 days late, and his most recent payment, which was late because XXX thought he\u2019d be able to refinance the loan before that payment was due).\u00a0 The loan is currently in good standing.<\/p>\n
As the property has been in XXX\u2019s family for over 100 years, he intends to keep it that way and plans exit the loan with a conventional refinance.\u00a0 He is currently holding this property as an investment property under his company, YYY, and will continue to do so.<\/p>\n
Property <\/span><\/strong><\/p>\nPrimary Collateral<\/span><\/p>\nCurrently, the property is 1,580 square feet, with 3 bedrooms and 1 bathroom.\u00a0 It sits on a level 4.6 acre lot with several outbuildings and was built in 1901.\u00a0 He plans to expand the house to 2,880 square feet with an additional bathroom, grandmother\u2019s quarters, full wrap around porch, and 2 a car garage.\u00a0 A line item budget is provided in the packet, and plans can be provided upon request.<\/p>\n
Cross Collateral<\/span><\/p>\nThe secondary collateral is two unimproved 5 acre lots with Commercial zoning, located just south of the core \u201cXXX\u201d Industrial warehouse district, and just north of the commercial district near the YYY County Fairgrounds. \u00a0Utilities, including city sewer, water, and electricity are available at the road.\u00a0 Currently, the lots are owned by XXX and his father, ZZZ.\u00a0 XXX will eventually be buying his father out, and plans to do so with a long term refi after the IRS liens get sorted out.\u00a0 A BPO with photos of the property is provided in the packet.<\/p>\n
<\/span><\/strong><\/p>\nValuation<\/span><\/strong><\/p>\nPrimary Collateral Projected Value<\/span> – A BPO has been provided by a local realtor.\u00a0 Using 3 sold comps and 3 active listings; he estimates a value of $500,000, subject to the completion of the proposed construction.\u00a0 This BPO is provided in the full packet for your review.<\/p>\n <\/strong><\/p>\nNOTE: <\/strong>The realtor does report that there are not a lot of comps available for homes of this age, as not many of them remain, and that there is a wide range of values.\u00a0 (However, keep in mind that the effective age of the property will be significantly less and more in line with current values) The Lowest $\/SF of the sold comps provided is $146.80\/SF, while the lowest $\/SF of the active listings provided is $149.47\/SF.\u00a0 Using the projected square footage of the subject property times the lowest $\/SF of all the sold\/active comps would yield a value of $416,926.\u00a0 For the purposes of this report, this more conservative number is used in the LTV calculation.<\/p>\nA formal appraisal has been ordered to give additional support to the valuation.\u00a0 This will be available for review as soon as we receive the report.<\/p>\n
Cross Collateral<\/span><\/p>\nThe same realtor has provided another BPO with 3 sold comps and 3 listings for this property as well.\u00a0 He reports that there are very limited sold comps, and the most weight is given to a listing with a very similar property within one mile from the subject.\u00a0 Note \u2013 this listing has been on the market for 2 years at $550,000, so a sale price at $550,000 for the Cross collateral seems optimistic.\u00a0 This BPO has been provided for your review.<\/p>\n
Income<\/span><\/strong><\/p>\nXXX owns his own trucking company, which reported a gross income of $414,000 in 2012.\u00a0 Bank statements have been provided to verify this income.\u00a0 A P&L has been provided, and his net income is reported to be $65,940.\u00a0 It should be noted that his company is currently paying all of his personal expenses (house payment, cell phone, food, land loan interest payments, etc\u2026).\u00a0 With these personal expenses being considered income, that would yield a net personal income of approximately $94,000<\/p>\n
Credit<\/span><\/strong><\/p>\nXXX has a mid-credit score of 662.\u00a0 He went through some financial troubles about 3 years ago, but since has cleaned up his credit, and is current on all his accounts.\u00a0 Currently, he only has 3 balances being reported.<\/p>\n
—<\/p>\n
– Clay (clay@privatemoneysource.com, 503-476-2909 or 800-971-1858)<\/p>\n
Clay is Vice President of Fairfield Financial, a primary source for private money loans since 1964.\u00a0 Fairfield works with a broad range of private money investors, in a broker capacity, finding, underwriting, presenting, closing, servicing, and when necessary, assisting in the workout of difficult loans.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Clay Sparkman We\u2019ve had a lot of nice solid little loans come in lately. (As you know, we have a tradition of, from time to time, presenting one of the loans that we have placed or are in the process of placing, so that blog readers can see (a) the types of loans that we […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[3,5,8,22,30],"tags":[40,42,44,49,51,58,59,60,61],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/689"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=689"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/689\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}