{"id":1206,"date":"2019-04-05T11:41:03","date_gmt":"2019-04-05T18:41:03","guid":{"rendered":"https:\/\/privatemoneysource.com\/broker-blog\/?p=1206"},"modified":"2019-04-05T11:41:03","modified_gmt":"2019-04-05T18:41:03","slug":"home-rehab-season-is-here","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/broker-blog\/?p=1206","title":{"rendered":"Home rehab season is here"},"content":{"rendered":"

S. Clay Sparkman<\/em>
\nOnce again it is spring, and that means that its time for the builders season to get underway.\u00a0 We finance new construction, but have also done a great many small rehab projects over the years.
\nThe numbers indicate that rehab activity is down generally over this past few years. If I were calculating whether or not to get into the markets, I think that I would take that as a positive sign. Many times in the past, the competition from “professional buyers” has been so high that it has been difficult to buy the right home project at a low enough price. (I am sure you have heard it said (correctly I might add) that the money on fixer projects is made almost entirely on the buy. ) By my assessment this may be an ideal time to jump in.
\nHere <\/a>is an article that deals with the question of how to finance your projects.
\nTypically our financing for a project can be had at 10-11% and 4 points for one year.
\nBelow you will find a summary for a project that we just funded. It is a perfect example of the type of projects we like to do.
\nThank you,
\nClay, clay@privatemoneysource.com, 503.476.2909
\n===<\/p>\n

Kristopher Gillmore<\/p>\n

Fairfield<\/strong> Financial Services, Inc<\/strong><\/p>\n

3327 SE 50th St, Portland, OR 97006<\/p>\n

Phone (503) 319-7294 \/ Fax (503) 419-4219 \/ E-mail: gillmore@privatemoneysource.com<\/a><\/p>\n

<\/span><\/strong><\/p>\n

REAL ESTATE PROSPECTUS<\/span><\/strong><\/p>\n

<\/span><\/strong>
\nSECURED LOAN<\/span><\/strong>
\nFix and Flip of SFR in Portland OR
\nLoan Details<\/span><\/strong><\/p>\n

    \n
  1. Loan Amount: $243,000<\/li>\n
  2. Term: 18 Months<\/li>\n
  3. Construction Holdback:\u00a0 $50,650<\/li>\n
  4. Interest Rate: 11%<\/li>\n
  5. Monthly Payments: $2,227.50 Interest Only<\/li>\n
  6. Security:\u00a0 Deed of Trust in 1st Position security interest in real property located at XXXX N Seneca St. Portland OR, 97203<\/li>\n
  7. Projected Value of property based on realtor comps:\u00a0 $370,000<\/li>\n
  8. ARV based on Realtor Comps: 66%<\/li>\n<\/ol>\n

    Loan Overview<\/span><\/strong>
    \nMr. XXXXXXXX (through his company XXXXXXXX, LLC) is requesting a loan to purchase, renovate, and flip a small SFR in Portland.\u00a0 Mr. XXXXXXXX will personally guarantee the loan, and he is putting down approximately $35,000 down with cash out of pocket.\u00a0 The purchase price of the property is $216,000, and the renovation budget is $50,650
    \nMr. XXXXXXXX has worked with Fairfield in the past as both a lender and a borrower. In a lender capacity, he\u2019s made 2 loans with Fairfield, with one loan outstanding with an $80,000 share owned by Shane.\u00a0 As borrower, he currently has a 7-unit rental property in Pendleton that was financed by Fairfield, with an outstanding balance of $180,000.\u00a0 Mr. XXXXXXXX\u2019s performance on this loan has been excellent, and he has set up an auto-pay through his bank, so he has a perfect pay history.
    \nProperty<\/span><\/strong>
    \nThe subject property was built in 1909, sits on a 50 x 100 SF lot, and has 2 bedrooms and 1 bathroom over a 924 SF main level.\u00a0 There is also a 528 SF basement.\u00a0 You can see more details on the property (not photos) at the following link: www.XXXXXXXX.
    \nA certified home inspection was performed and included in the packet for review.\u00a0 The inspection did not reveal any issues that Mr. XXXXXXXX was not already anticipating or already addressing in the budget provided.
    \nMr. XXXXXXXX will be hiring out some of the work, but he plans to do the bulk of the work himself.\u00a0 Mr. XXXXXXXX used to carry a contractor\u2019s license, and he has the skill, experience, and equipment to do the work.
    \nThere aren\u2019t many photos of the property online, but photos have been included in the packet as well as the inspection report.
    \n <\/span><\/strong>
    \nValuation<\/span><\/strong>
    \nMr. XXXXXXXX and his realtor have provided 11 recent comps (9 are sold, 2 are pending) to come up with an ARV of 370K.\u00a0 This works out to $254.82\/SF
    \nThe comps vary with sold prices from $419,900 \u2013 319,000, and $\/SF ranging from $221\/SF – $425\/SF (the $425 is an outlier and is only 890\/sf).\u00a0 Only 2 of the houses have a sold $\/SF in the $221 range.\u00a0 The next lowest is $248, and the rest are all over $300\/SF. There\u2019s a strong correlation between the $\/SF and the size of the houses, with the smaller houses (I would guess not including a basement) having the highest $\/SF.
    \nFor a newly remodeled home, I think the $254\/SF estimate is pretty reasonable.
    \nThese comps have been provided in the packet for your review.
    \nIncome<\/span><\/strong>
    \nA Commercial application has been provided by the borrower.\u00a0 Mr. XXXXXXXX reports an annual income of $81,000 and a net worth of $422,000.\u00a0 However, this doesn\u2019t reflect the new loan he recently funded with Fairfield, which would increase his net worth by $80,000.
    \nCredit<\/span><\/strong>
    \nA credit report has been provided separately from the packet.\u00a0 This credit report is a bit on the old side (it was pulled on 11\/30\/18), but Mr. XXXXXXXX has excellent credit scores of 769, 794, and 797 as shown on this report.<\/p>\n","protected":false},"excerpt":{"rendered":"

    S. Clay Sparkman Once again it is spring, and that means that its time for the builders season to get underway.\u00a0 We finance new construction, but have also done a great many small rehab projects over the years. The numbers indicate that rehab activity is down generally over this past few years. If I were […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[14,16,19],"tags":[38,42,43,46,47,48,49,50,51,53,54,55,58,61,62,63,64,65,68],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/1206"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1206"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/1206\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}