{"id":1267,"date":"2019-12-04T19:08:15","date_gmt":"2019-12-04T19:08:15","guid":{"rendered":"https:\/\/privatemoneysource.com\/broker-blog\/?p=1267"},"modified":"2019-12-04T19:08:15","modified_gmt":"2019-12-04T19:08:15","slug":"a-typical-loan","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/broker-blog\/?p=1267","title":{"rendered":"A Typical Loan"},"content":{"rendered":"\n

Clay Sparkman<\/em><\/p>\n\n\n\n

Here is a prospectus for a loan that we placed in 2019. This is fairly typical of the types of loans that we do. We provide samples of our work several times per year.  Not only does it give borrowers and brokers a better idea of the kinds of things that we do, but it also gives them a nice working format for presenting new loans.<\/em><\/p>\n\n\n\n

REAL ESTATE PROSPECTUS<\/h1>\n\n\n\n

SECURED<\/strong> <\/strong>LOAN<\/strong><\/p>\n\n\n\n

Cash out refi on SFR\nrental property in Lake Oswego, OR<\/p>\n\n\n\n

Loan Details<\/h1>\n\n\n\n
  1. Loan Amount: $380,000<\/li>
  2. Term: 24 Months<\/li>
  3. Interest\nRate: 9%<\/li>
  4. Monthly Payments:\n$2,850 Interest Only<\/li>
  5. Security: Deed of Trust in 1st Position\nsecurity interest in real property\nat XXXXXXXXXXXX, Lake Oswego, OR<\/li>
  6. Clackamas County Assessor Market Value $1,768,046<\/li>
  7. LTV based on Assessor Value: 21%<\/li><\/ol>\n\n\n\n

    Loan Overview<\/h1>\n\n\n\n

    Mr. and Mrs. XXXXXXXXX purchased this property with all cash in 2014 for 1,450,000 in April of 2014.  Mr. XXXXXXXXX is an Attorney in CA, who was specializing in construction liability law.  Shortly after purchasing this house, there were changes to the regulations in CA that essentially destroyed his business.  This caused a cash flow shortage (and a hit to their credit), and he then borrowed $264,000 against this house through Fairfield.  His loan is ballooning in a few months, and rather than pay it off, he\u2019d like to pull out some more cash to take advantage of an investment opportunity.  His current workload is such that another private loan through Fairfield (vs. a more conventional loan) is attractive because he simply doesn\u2019t have time to shop around or go through the process with a bank.    <\/p>\n\n\n\n

    The property is being used as a short-term rental, marketed to people moving to the area while they look for permanent housing.  The borrower reports that a typical rental time is 2-6 months.  Currently, they are between tenants.<\/p>\n\n\n\n

    The borrower plans to exit this loan with a refinance or to simply pay it off with cash out of pocket in the next 2 years.<\/p>\n\n\n\n

    Property and Valuation<\/h1>\n\n\n\n

    The property is .6 acres with 7,569\nSF home that includes 4 bedrooms, 3.5 baths, finished basement, attached 2\nstall garage, detached 3 stall garage (that the borrowers intend to convert\ninto a separate living space), climate controlled wine cellar, vaulted\nceilings, sun room, and high end finishes. <\/p>\n\n\n\n

    I visited the property when we made the loan in 2017, and although the furnishings are different, the photos are a good representation of the house. This is a very nice property in a high-end location in Lake Oswego.\u00a0 The land value alone is estimated by the county assessor as $423,646.\u00a0 Zillow.com estimates this property to be worth just under 1.7MM, and Realtor.com estimates a value of $1,832,400. I have no concerns with the value of this property as being more than sufficient to collateralize this loan with very little risk.<\/p>\n\n\n\n

    Income<\/h1>\n\n\n\n

    A\ncommercial loan application has been provided by the borrower\u2019s showing\nan annual income of approximately $360,000.  Property taxes are not included in this loan,\nor their current loan, and the borrower has kept them current.  In addition, I\u2019ve included a copy of their\npay history in the loan packet.  Mr.\nXXXXXXXXX\u2019s bookkeeper makes the payments each month, and the pay history is\nexcellent.  The June 2019 payment was\nlate, but that was an oversight by the bookkeeper.  When I let Mr. XXXXXXXXX know, they sent a\ncheck out immediately. <\/p>\n\n\n\n

    Credit and Prelim<\/h1>\n\n\n\n

    \n\nA credit report for Mr. and Mrs. XXXXXXXXX have\nbeen provided in the packet.  As I\nbriefly mentioned above, the demise of Mr. XXXXXXXXX\u2019s practice a few years ago\nhad a big impact on their credit.  At the\ntime of the loan in 2017, their credit scores were in the upper 500\u2019s.  currently, their scores are in the mid-600\u2019s,\neach with a mid-score of 643.  There are\nsome charge-offs on the report, and one account still in collection left over\nfrom his business, but all other accounts are current.  I believe this is an excellent sign, and it\nhas also put them in a position to where they could qualify (or at least meet a\nmin. credit score requirement) for a more traditional \n\n\n\n<\/p>\n\n\n\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    Clay Sparkman Here is a prospectus for a loan that we placed in 2019. This is fairly typical of the types of loans that we do. We provide samples of our work several times per year.  Not only does it give borrowers and brokers a better idea of the kinds of things that we do, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[14],"tags":[33,37,38,39,42,43,46,50,53,54,55,56,58,59,61,62],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/1267"}],"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=1267"}],"version-history":[{"count":5,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/1267\/revisions"}],"predecessor-version":[{"id":1272,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/1267\/revisions\/1272"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}