Texas' Premier Hard Money Lender
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We are direct residential lenders servicing private
residential investors in Texas. We specialize in short term real estate secured
loans often referred to as bridge or gap type financing, or hard money loans. We provide these loans
for primarily residential investors, in all price ranges.
A hard money lender may over look many items that are critical to a traditional lender and soft money loan. These overlooked details may include:
We realize that every deal has a unique set of circumstances: we understand this, and offer to deal with each borrower on a one-to-one basis.
What does "100% financing" versus "Loans up to 70% LTV" mean? Let's use an example. Say you've found a property that will have a contract price of $60,000. You have estimated a repair amount of $10,000, and an appraised value of $100,000. You'll be into the property at $70,000, or 70% Loan to Value (this example excludes any closing costs). (This also assumes we approve the property to be a 70% LTV type property; more on that later.) Therefore, we would loan out $70,000, or 100% of your costs. Now, let's say that it turns out that your repair estimate is $15,000. This would put you in at 75% LTV. At this point, we will require you to bring any amount over approved LTV, or 70% in this case. Therefore, you would need to bring $5,000 to closing. This is done so we can ensure that all needed repairs are done to the property. As your draws are completed, we would be loaning your own money back to you at the end of the rehab. Of course, you wouldn't be charged interest on your own money, meaning that you won't be charged interest on the $5,000.
What determines if my property will be approved by FPLP as a 70% type loan? All definitions are subject to interpretation by the lender.
Please describe my purchase process Funding Partners, LP (FPLP) is an asset based lender working exclusively with single family investment properties. Most transactions which are entered into are risky due to the amount of repairs typically required to bring the property up to our required standards. As such, we initially require that the property be placed in our name and once repairs have been completed and inspected, title can be transferred into our client’s name. A typical FPLP transaction requires the client to assign their contract to FPLP, who will then close the property and simultaneously enter into a Contract for Deed with our client thus allowing the construction fees to be rolled into the transaction.
Why should an investor use a Hard Money Lender (HML) rather than banks and mortgage companies?
What do I need to do to get started? Will you provide a pre-approval letter? For both questions, please complete our application and fax it to the number provided. Please write your email address clearly. You should receive an email within a day.
What are your terms, fees, and
interest rates?
Why do you limit your ARV to
$75,000?
Can I make payments to FPLP
online? Can I have more than one loan at a time? FPLP does not have a specific number of loans that anyone can have at one time. The limit will be based on each borrower's ability to handle multiple properties as well as their financial ability to make the monthly payments.
Can I start work prior to purchasing my property? Funding Partners does not attempt to control what you do prior to closing. We strongly suggest you discuss this with your legal counsel. However, if work has commenced on the property prior to closing, your title company as well as FPLP will require, at a minimum, the following:
This is to ensure that constitutional mechanic liens will not arise and take priority over the purchase money mortgage and to ensure the title company will issue a title policy on the property.
If I am buying the home in a business name, do I have to personally guarantee the note? Yes, although we offer the flexibility of titling the property as a Trust or business entity, we require a personal guarantee on most of our transactions.
Can I live in the house during
the course of the loan?
Will FPLP lend on a mobile or
modular home?
No. We will loan on subdivided,
improved lots and land; we DO NOT loan on raw, undeveloped land. Do you finance in rural areas? No. If your property is on an unpaved road, it's rural. Can I roll the closing costs into my loan? Funding Partners will loan up to 70% of the After Repaired Value of the property. As long as the loan does not exceed this, you may receive 100% of the sale price, 100% of your repair costs, and even have some or all of your closing costs rolled into the loan. The bottom line is that if your loan to value is sufficiently strong, you can get into a property with little or no money down. However, we typically do not allow cash to be pulled out of a loan. Do you loan on New Construction? Yes:
I want to complete a new house construction project. Do you require any particular info about it? Yes. If this is a completion of an existing new construction property, we require an update on the status of all building permits from the city in which the property is being built in. We will not be able to close, prior to disclosure of this information. If this is a completion of an existing new construction property, you may save money on the water and sewer tap if you can get a letter from the previous owner, agreeing to transfer the ownership of the taps. See attached example. I am about to purchase a property which, I think, has permits from the City. What should I do? Prior to purchase of the property, you should ask the city if there are any outstanding permits that haven't been closed. Do you also loan on acquisitions of income-producing properties or only on rehabs? As long as its 1) residential, 2) non-homestead, 3) fits our lending criteria, & 4) our exposure is 70% LTV or less, we will consider it. At closing, we will hold in escrow any property taxes that were received from the title company. When you close out of the property, we will credit the escrowed taxes on your payoff statement. Normally, we do not escrow property taxes. However, on properties which appraise for $400,000 or over, we may require a monthly tax escrow. If your loan with us is 1 year old, we reserve the right to begin escrowing taxes and adding it to your monthly payment.
Do you finance properties that are involved in
assignments or flips?
Do you have a minimum credit score? No. As hard money lenders, our primary criteria is the property being secured with the loan. Upon submission of your application, your credit will be examined. This helps us determine your exit strategies .
Do you require a survey?
Seller's
Disclosure Notice: Should I receive/give one? Why can’t I use my own appraisal or appraiser? We use our appraisers for same reason a bank uses their own approved list of appraisers. The appraisers on our approved list are familiar with investment properties, and perhaps have been investors themselves. We ask them to look for items such as what the neighborhood is like, boarded up houses in the area if any, what type of major repairs need to be done to the property to bring it up to marketability, if the area has mostly retail or seller financed sales, and what an actual sales price and time frame would be. Although most real estate agents and investors tend to look at the “per square foot” price of a property when trying to assess the value of a property, that is generally not the way that an appraiser appraises a property. They also don’t use the appraisal district’s assessed value. They look for items, such as what the neighborhood sales are, the specific differences between those sales and the subject property, location of the subject property to positive or negative influences, how long ago the sales were, and the type of financing the other property sales reported as having. Generally, an appraiser will not use a listing as a comparable property if enough actual sales comps are usable. We keep track of the price that a property sells for when an investor sells the property on a retail sale, versus the appraisal value. Even given market timing fluctuations between the sale date and the appraisal date, the appraisal is oftentimes within 5% of the sales price. There are, of course, exceptions, especially when there have been few sales in an area. What FPLP is mainly concerned with is, if FPLP has to take control of the property, what’s the likelihood of a quick sale and what the price would be for that sale. If you want to send an appraisal to us that has previously been prepared for your property and is substantially different from ours, you are more than welcome to do that. We will take a look at both appraisals, and determine where the differences lie. You may also send in actual comps that you know of and that the appraiser may not know of. Please do not send in comps or listing from the MLS, because we, as a licensed Real Estate Broker have access to the MLS. Remember, we don’t make a dime if we don’t close a property for our clients simply due to a “low” appraisal. However, while you don’t like losing money, neither do we. We have been real estate investors for almost 15 years, and sometimes we use our “experience factor” in determining the validity of investing in a property. That is some of the value you receive when you use Funding Partners, LP as your lender of choice. It is our policy to not lend on a property that we, ourselves as investors, wouldn’t purchase for our portfolio. We will not lend on a property that, in our minds, is not a good investment. And, we would encourage you not to invest in that property also.
How can you claim to be Texas' Most Experienced Asset Based Hard Money Lender? We have been residential investors for over 15 years. The principals and employees of FPLP have over 50 years of real estate experience. As investors, we have bought, rehabbed and sold or rented over 2,000 homes. There probably isn't any situation in single family investing that we haven't encountered. With the combination of investing and lending, we don't think that there is another company in Texas as large as we are who live up to that claim.
What about other types of improved property? Give us a call. You never know until you ask.
Yes. Do you want to work your entire life? NO! What you want to do is to accumulate and build real wealth, as a Real Estate investor. One of the ways to accumulate and build wealth is to own properties, free and clear of any debt. Want to know how to do that? Email us at info@fundingpartners.com .
Funding Partners, LP is the company name we use to purchase and sell the properties under. It is the limited partner for Acquisition Funding Source, Inc. We basically use this for asset protection purposes.
Why should I use Funding Partners as my rehab lender? Here are just a few:
Do you have helpful suggestions on dealing with contractors and sub-contractors? Yes, please click here. |
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