{"id":177,"date":"2010-10-02T14:24:37","date_gmt":"2010-10-02T21:24:37","guid":{"rendered":"http:\/\/privatemoneysource.com\/broker-blog\/?p=177"},"modified":"2010-10-02T14:24:37","modified_gmt":"2010-10-02T21:24:37","slug":"calling-all-rehabbers-short-sale-buyers-and-quick-flip-artists","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/broker-blog\/?p=177","title":{"rendered":"Calling all rehabbers, short sale buyers and quick flip artists"},"content":{"rendered":"

Kris Gillmore and Clay Sparkman
\nOver the past three years we’ve all watched real estate prices come crashing down, in many cases forcing lenders to foreclose and take back the property.\u00a0 Although this is a sad misfortune for some, it is a tremendous opportunity for others.\u00a0 With regard to quick-flip investment property, I have always been of the opinion that the profit is in the purchase, not in the renovation or sale.\u00a0 And now more than ever banks are willing to unload their inventory at a discount below market value.
\nTo encourage the sale of the growing home inventory, President Obama instituted a short sale program this spring offering small incentives to lenders to accept amounts lower than the principal balance<\/a>.\u00a0 It is questionable whether or not this program has actually been effective.\u00a0 However, now the issue is being further pressurized from a different direction.\u00a0 With GMAC, JP Morgan Chase, and Bank of America freezing foreclosure or putting selective foreclosures on hold<\/a>, the game has changed again.\u00a0 It is my suspicion that this will lead to new opportunities for investment buyers, as banks begin bending over backward in search of a way to extricate themselves from the mess they are in, and this will certainly include any number of short sales that the banks were previously unwilling to consider.
\nAs you know from previous posts, Fairfield Financial is laser focused on doing these types of loans.\u00a0 Here are some guidelines for what we\u2019re looking for and what we\u2019re generally able to fund.
\n70% of the ARV – Depending on the area and the strength of the borrower, 70% LTV is our target (including fees).\u00a0 We hold construction funds in an escrow account, which enables us to loan off the ARV, not the purchase price.
\nLoan Size – Right now our sweet spot is in the $150,000 – $250,000 range, although we’ll consider loans from $50,000 – $500,000.
\n100% Financing – Yes, we can finance 100% of the acquisition and rehab costs, assuming that the LTV is appropriate.
\nDown Payment – We do require that the borrower have some skin in the game for at least the first few loans. Generally speaking, this amount can be as little as 5% down, but it’s really a case by case basis that depends on the property and the strength of the borrower.
\nSecondary collateral – If a down payment isn’t feasible, we can always consider the use of a second property as collateral. This is another way to put some skin in the game.
\nPrimary Residence – We can consider purchase and rehab loans for personal use in the state of Oregon only. The same terms apply to personal and investment loans.
\nTerm \u2013 Typically, these are 12 month deals with no prepayment penalty.\u00a0 Multifamily rental properties can go up to five years, but these are all on a case by case basis.
\nExit Strategy \u2013 As always, this is critical. We’re looking for borrowers with a solid exit plan.
\nKnowledge of local market \u2013 This goes hand in hand with the exit strategy. We want to be sure that our borrowers are familiar with the current market trends, and that their plan is consistent with local market activity.
\nFor more information on this matter, please visit the Rehab and Construction loan FAQ on our web site at http:\/\/www.privatemoneysource.com\/articles\/rehabfaq.php.<\/p>\n

— Clay (clay@privatemoneysource.com, 503-476-2909)<\/p>\n

Clay is Vice President of Fairfield Financial, a primary source for private money since 1964.\u00a0 Fairfield is currently targeting loans in OR, WA, AK, CA, CO, ID, FL, GA, ID, MT, NV, NY, OK and TX.\u00a0 To submit a loan to Fairfield for consideration: <\/em>http:\/\/www.privatemoneysource.com\/loanproposal.php<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Kris Gillmore and Clay Sparkman Over the past three years we’ve all watched real estate prices come crashing down, in many cases forcing lenders to foreclose and take back the property.\u00a0 Although this is a sad misfortune for some, it is a tremendous opportunity for others.\u00a0 With regard to quick-flip investment property, I have always […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[2,13,17,19],"tags":[42,43,44,45,46,50,53,54,55,56,57,58,59,60,61,62,63],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/177"}],"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=177"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/177\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}