For instance, if you have a property valued at $100,000.00, and owe $30,000.00 in tax liens, and we approve a loan for 65% of the value of your property, then you will be able to take an additional $35,000.00 at closing for your own use, less any applicable closing costs and lender fees. As a general rule of thumb however, we like to know where our loan proceeds are going.
Sometimes. We will generally lend you up to 70% of the property value and, unlike a conventional lender, will not reduce the loan amount just because the purchase price is much lower than the property value. Thus, if you buy right, you may be able to get a loan for 100% of the purchase price, although most times we require you to at least pay closing costs so the Borrower has some “skin in the game.”
For example, if you find a property worth $100,000.00 and get the sellers to unload it for $60,000.00, we may well give you the full $60,000.00 purchase price.
On the other hand, if you are buying a rehab property that is worth only what you are paying for it until such time that it can be repaired, we will most likely will do one of two things: 1) give you only up to 65% of the purchase price (which means you must find the other 35%); or 2) give you the full purchase price and require you to establish a construction reserve to insure you make the repairs to increase the value to an amount substantially higher than the original purchase price.
Hard money is not appropriate in some circumstances: When you need money “long term.” Most hard money deals are for no more than 6 months to 2 years;
When the deal is “tight.” Don’t look for hard money loans higher than 65-70% of the conservative property value, if that. Hard money lenders aren’t interested in losing money, and the only way to ensure that is to lend based upon very conservative loan-to-value ratios;
Oddball properties. Not many hard money lenders are looking to get involved in farm operations, mobile homes, gas stations or geo-desic domes.
Principal residences. Restoration Capital, LLC is not properly licensed to provide loans to owner-occupants. We only lend on commercial or investment properties for business purposes. If you plan on moving into the property immediately after closing, we are happy to provide you with an appropriate referral.