Services
Loan Programs
Fix and Flip
Fix and Flip
How it Works
A fix-and-flip loan is a vital tool for real estate investors engaged in house-flipping, a strategy where properties are purchased, renovated, and then sold for profit. These loans, often categorized as Hard Money Loans, play a crucial role in facilitating quick renovations and profitable resales.
What sets fix and flip loans apart is their ability to expedite property acquisitions without the extensive formalities typically associated with traditional lending institutions. Traditional lenders seldom offer short-term loans tailored to the needs of investors in the house-flipping business. Incontrast, private lenders, such as Legacy Preferred Lending, operate with a level of flexibility and speed that meets these investors’ requirements.
Hard money lenders are backed by private individuals, allowing them to make loan approval and disbursement decisions swiftly and efficiently. Rather than primarily considering the borrower’s credit or income, these lenders focus on the property’s intrinsic value and your assets. This asset-based lending approach hinges on the property’s estimated “After Repair Value” to determine the loan amount and associated terms. This innovative approach empowers real estate investors to seize opportunities in the house-flipping market with confidence and agility.
Benefits
- Quick Resell: The financing option allows real estate investors to quickly resell a property.
- Minimized Investor’s Capital: The financing option aims to minimize the amount of money that a real estate investor has to invest in a property. This could be achieved through a combination of lower down payments and flexible terms.
- Low Down Payment: Depending on the specific deal, investors can bring down payments as low as 10-30% or even less. This lower initial investment can be attractive to investors who want to leverage their capital across multiple properties.
- Fast Approval: The financing option offers a fast approval process, with the ability to fund a property in less than two days. This is significantly quicker than traditional mortgages, which often take 30-60 days for approval and funding.
- No Hard Credit Pull: Unlike traditional mortgages, which often require a hard credit check, this financing option primarily focuses on the assets being financed and the details of the deal. This is helpful for investors with less-than-perfect credit.
- Short and Flexible Loan Terms: The loan terms are shorter and more flexible, ranging from 3, 6, 9, to 12 months. This flexibility allows investors to tailor their financing to the specific needs and timeline of their real estate projects.
Bridge Loan
Bridge Loan
How it Works
A Bridge Loan is your expedited pathway to securing financing for property acquisition while still in possession of another property. This financial tool is also known as a swing loan, gap loan, or gap financing, highlighting its role in bridging financial gaps during real estate transactions.
This type of loan offers a crucial advantage to real estate investors, enabling them to capitalize on opportunities to purchase properties at a discounted rate from the seller. In return for the convenience and speed it offers, these loans harness the existing equity in your property portfolio. This means you can seamlessly engage in property transactions, ensuring you never miss out on an investment opportunitydue to timing constraints. Bridge loans are a savvy financial instrument for investors like you, facilitating agile and profitable real estate ventures.
Benefits
Opportunity to Buy Before Selling: This service enables homeowners to purchase a new house without having to wait for their current home to be sold. This can be particularly advantageous in a competitive real estate market or when homeowners have already found their dream home.
No Sale Contingency: Unlike a traditional real estate transaction that might include a sale contingency (where the purchase is contingent on the sale of the current home), this option does not require such a contingency. It provides more flexibility in the home-buying process.
Additional Funds: This service may provide additional funds to homeowners in cases of sudden or time-sensitive transactions. This can be helpful if homeowners need extra financial resources to secure a new home quickly.
Extended Time to Sell Current Home: It allows homeowners extra time to sell their existing home while having the added funds available for a down payment on their new home. This can alleviate the pressure of having to sell the current home quickly.
Faster Approval and Funding: The service may offer a quicker approval and funding process compared to traditional loans or mortgages. This speed can be crucial in competitive real estate markets where properties may get multiple offers.
Example
Assume your current home is valued at 223k, and you owe 155k on your mortgage. A loan for 80% of its current value would be $178,400. The remaining balance that you could use towards a down payment not including closing costs and fees, would be $23,400.
223k (Current homes value)
X 80% (Bridge Loan LTV)
=178,400
-155k (mortgage balance)
=23,400 (New down payment not including closing costs and fees)
Transactional Funding
Transactional Funding
How it Works
Transactional funding, tailor-made for wholesalers, offers a swift and effective solution for investment property transactions. This financial tool, also dubbed “flash funding” or same-day funding, represents a distinctive strategy that empowers real estate investors.
The concept is straightforward yet potent: investors secure a loan to purchase a property and promptly repay the loan, often within a week or even on the same day. What sets this approach apart is the method of repayment, which relies on the profits generated from the investment itself. These loans are uniquely suited for real estate deals characterized by rapid turnarounds, where buyers anticipate closing the transaction and reselling the property within a short time frame. Transactional funding stands as a valuable resource, enabling investors to seize time-sensitive opportunities in the ever-evolving real estate market.
Cash-Out Refinancing
Cash-Out Refinancing
How it Works
A cash-out refinance loan seamlessly combines the features of conventional mortgage refinancing with the benefits of an equity loan. Homeowners throughout the United States employ this method to access the equity locked within their homes in the form of cash.
Here’s how it works: When a homeowner chooses to refinance their mortgage, they unlock a portion of their home’s equity, which is essentially the difference between the remaining balance on their loan and the current market value of their home. According to Texas law, homeowners can tap into as much as 80% of their home’s equity. The newly refinanced mortgage then covers the remaining balance of the previous loan while simultaneously creating a fresh loan structure.
For real estate investors, cash-out refinance presents an exciting opportunity to leverage the value tied to a real estate project even before its sale. This financial strategy empowers investors to reinvest in new projects swiftly, ensuring they take advantage of every promising opportunity in the dynamic real estate market.
