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Hard Money Loans

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Hard Money Loan

No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity. That opportunity is called FixNFlip, and the opportunity is huge. Foreclosures are at the heart of the FixNFlip business, with more short sales now than ever before, America’s weak real estate market seems to set new dismal records each month. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ and making huge profits.

Short Sale properties can be: 1-4 families’, multi-families 5 +, commercial, mix-use, hotels, hi-rises, resorts, golf courses, private jets or anything that make sense.

Hard Money is Smart Money. It is the easiest and fastest money you can get today. Interest rates varies from 7.49 to 12% and from 12 to 18 months term. Fixed loans are available for BuyFixNKeep for rental properties starting from 6.5% for 30 years.

This example bellow compares between using your cash or Hard Money for investing: - Assuming that you have $400,000 in your bank account, property purchase price is $250,000 and the rehab costs is $120,000. The period from buying to selling took 6 months. Interest rate for this example is 12%. We are not calculating other costs or commissions paid to simplify the example.

i. Starting: $400,000 this is the money you have in the bank
ii. Price: $250,000 this the purchase price of the property
iii. Rehab Costs: $120,000 this is the total cost for rehabbing the property
iv. Total Costs: Purchase price + Rehab Costs= $250,000 + $120,000 = $370,000
v. Down Payment: is Total costs x 10% or $370,000 x 10% = $37,000
vi. Hard Loan: Total Costs x 90% = $370,000 x 90% = $333,000
vii. 4 Points: loan amount x 4% or $333,000 x 4% = $13,320
viii. 6 Months %: 6 months interest paid to Lender or $333,000 x 12% ÷ 12 months x 6 months = $19,980
ix. Total Paid: Money needed for each house equals to down payment X + Points Y + 6 months Interest Z or X + Y + Z = $37,000 + $13,320 + $19,980 = $70,300
x. Ending $: Balance left in your bank account; when you used your cash to buy, you are left with $30,000 when you used a Hard Money Lender you bought 5 houses and still left with $48,500 in your bank account
xi. Sold for: The price you sold the rehabbed property for
xii. Profit: The profit you made; your cash made you $180,000 profit. Using Hard Money, you made $733,500

The cash return on this investment: - Profit ÷ Total invested
Using your cash: - $180,000 ÷ $370,000 = 48.65%
Using Hard Money: - $733,500 ÷ $351,500 = 208.67% WOW.

Conclusion: - Hard Money is Smart Money and will make you more money than your competition.

You must get approved by INDYBANC before you go looking for a property. The reason for this is that the best opportunities moves fast. If you don’t act fast the deal will go to someone else. Let us approve you for the loan and provide you with “Proof of Funds” letter which enables you to negotiate the purchases of these properties and close fast because you are already approved.

This is what you should do now:
Prepare these papers (Each must be in separate attachment) and email them to info@indybanc.com or fax to 973.241.1367 or 888.222.2993 or bring them by hand to the office.

  • Valid ID ; Active Driver’s License; Social Security Card; Foreign National Passport

  • Previous year personal Tax Return; Not needed for Foreign Nationals

  • Your LLC’s last year Tax Return (Not needed if a new LLC)

  • Two months bank statements ( all pages)

  • Business Entity Documents (1) Operating Agreement (2) Certificate of Good Standing (print this from the internet or ask your accountant to help you (3) Articles of Organization/Charter

  • Purchase Sales Agreement Only if this is a purchase

  • Hud 1 proof of previous purchase if this a refinance – cash-out

  • Current Insurance if this is a refinance or

  • Twelve months Builder’s Risk Policy for construction/rehab

  • Title Company or Lawyer Information Name, address, number, email (type on word document)

  • Construction Budget

We will have your loan approval and “Proof of Funds” Letter ready when you come.

Steps for investing in FixNFlip

1) Finding These Properties:

Internet, word of mouth or working with a Realtor

2) Due Diligence:
Valuation Data
  • Property Records

  • Property Tax Records

  • Economic Data for the Area

  • Comparable Sales

  • Neighborhood Crime Rate

  • Required Repairs

  • Hazardous Waste

  • Building Code Violations

  • Flood Zone Information

Inspection Checklist:

  • Plumbing

  • Electrical

  • HVAC (Heating and Cooling)

  • Structural

  • Surfaces (Walls, Floors, Counters)

  • Doors & Windows

  • Security (Locks & Alarms)

  • Roofing

  • Foundation

  • Wall Facings

  • Irrigation/Water Drainage

  • Ingress/Egress

  • Site Hazards

3) Contract & Closing:

Expert Lawyers, Title Insurance/Examination, Escrow, Taxes, Recordings,

4) Rehab:

Contractor Checklist:

  • Active License in Good Standing

  • Insurance (Bond if Necessary)

  • Evidence of Good Standing

  • Multiple Trade References

  • Understand Your Risk of Mechanic’s Liens

  • Contract for a “Guaranteed Maximum Price”

  • Establish a Firm Timeline with Delay Penalties

  • Review the Contract with our Attorney

  • Ensure we have included the entire Scope of work

  • Thoroughly Discuss the Process

5) Exit Strategy:
  • Sell “Flip” or

  • Keep for rentals.

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