Lending Criteria
We lend in the Greater Baltimore area and the state of Maryland. We do not lend in D.C. or out-of-state.
The total loan amount is calculated off the After Repair Value (ARV). This amount will be used for the property purchase, repairs, closing costs and points. The ARV is our best guess of the re-sell value of the property, based on the location and your planned improvements. Our Loan-To-Value (LTV) is typically 65-70%. Since the ARV is the key to determining the loan amount, it must be reasonable and realistic.
Keep you money in your pocket. We don’t use a traditional appraisal. One of our principals will personally meet you at your property to evaluate the repair work needed, as well as make a valuation of the property (as-is and after-repairs). This gives us a chance to meet you and get a clearer picture of your plans for the house.
No. Keep your money.
Sometimes. This is something that we don’t often do, but if the deal and the borrower are great, we’ll work with you.
Sometimes, but this is typically done only in lower LTV situations.
Absolutely. The second property must, however, be free-and-clear or have a lower LTV (usually 50-60%, after adding our lien).
No. We focus on the property and the deal. We will look at your credit report, but we are much less restrictive than an institutional lender (or most national hard money lenders).
No. I often work with new investors.
Usually you will only need to bring points and closing costs to closing. If your loan to value is low enough, these may be financed. We do, however, usually require that you have personal cash reserves in the form of money in the bank or a line of credit. These reserves are necessary for you to get the renovations started to earn your draws, to fund cost overruns on your repairs, and to make monthly interest payments. A rule of thumb is that the borrower should have available reserves of approximately 10% of the ARV.
Yes. See the answer to the money-down question, above.
We can use yours to determine if the loan will be approved, but when we approve the loan, we will likely need to pull one directly for our file.
No. We are essentially a no doc lender. We do, however, often verify your cash reserves.
This is determined by your previous experience, your performance history, your credit, the deal and your available cash. Initially, borrowers are allowed to one open loan. Upon payoff, they will be allowed two open loans. Decisions beyond that are on a case-by-case basis.
Yes, but you have to demonstrate the ability to refi out of our loan.
No, but if you are buying from an owner-occupant, the owner must vacate prior to settlement.
Yes, as long as it meets our standard criteria. In fact, we will often reimburse you for the funds used to purchase the property and/or pay off any liens up to our approved LTV.
No. We are a commercial lender and do not lend on owner-occupied properties.
Yes and yes.
Yes. You must have a Builders Risk policy for a property that will be renovated and we must be shown as an additional insured. If the property is an occupied rental property, we require a Landlord policy.
We schedule on-site inspections only after we have determined that we are very likely to do the loan. We don’t want to waste your time, or ours, looking at deals that we are unlikely to fund. However, if the immediate neighborhood and/or the condition of the property is significantly worse than expected, we may reconsider the viability of the project.
Yes.
No, but our loan documents are prepared by King Title in Pikesville, so you will save money by closing there. Their rates are cheaper than most and the quality of their work is unparalleled.
No. If your overall LTV falls within our requirements, we can issue a larger loan that pays off your existing liens and provides for construction funding, but we will not issue a second position loan.
Before your first draw, we'll work with you to create a list of work items that add up to the total draw schedule. When you need a draw, we'll come out, identify the work items that are complete and pay out the total value of the completed work. You control how often and when you'd like a draw.
Note that you must be current on your interest payments to receive a draw.
No. You have to use your own resources (or your contractor’s) to get the job to each draw. At that time, we’ll inspect and release the draw funds.
We want to be your hard money lender …… Easy, Fast
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