May 10, 2017

Frequently Asked Questions (FAQ)

How Fast Can You Fund My Deal?

We typically fund deals in 5 days or less.

Where do you lend money?

We lend in the Atlanta, Georgia area and surrounding counties.

Do you make permanent loans?

No, our loans are usually for a 12 month term or less, but we have arranged financing for more than 12 months in certain situations, particularly commercial projects. We do have permanent lending partners that will be able to assist with your long term needs on single family properties.

Are your rates higher than banks?

We are a private lender with private money. We take risks that banks ordinarily would not and therefore charge a higher rate for the use of our funds. You will find that although the funds may cost more, it is less expensive than having a venture partner to finance your project.

What is the minimum credit score you will accept?

We do not have a minimum credit score and work with investors of all types of credit.  However, credit and financial strength factor into the interest rate, down payment, and points.

I’ve been turned down at another large bank, are you able to lend to me?

The best way to find out is to click on the Apply Button. We underwrite and make our own loans based upon our decisions and understanding of the marketplace and your particular property. Usually if the property is worth it, we will give your loan request serious consideration.

What do ARV and LTV mean?

(LTV) – the value of the property in relation to the loan on the property and After Repair Value (ARV) – the value of the property after all improvements or construction has been completed.

What is your maximum loan to value (LTV)?

We can lend up to 65% of the After Repair Value (ARV) of the property

What is your loan origination fee? Interest rates?

Our loan origination fee is 4% of the loan amount (minimum $2,500). Interest rates are as low as 11.99%.

Is an appraisal required?  

An appraisal is not required.  This saves you time and money from most other lenders that require you to pay for (and wait for!) an appraisal.

How Do you Determine the After Repair Value?

We determine the After Repair Value (ARV) of the subject property using a competitive market analysis or comparative market analysis (CMA).  The comps used in the CMA will be from similar properties in terms of size, age, condition, construction, etc. within a radius of 0.5 miles from the subject property that have sold within the previous 6 months.

Do you charge prepayment penalties?

No.  Your loan may be paid at any time with not prepayment penalty.  The faster you rehab a property and sell or refinance it, the more profit you make.

Do you lend money for repairs?

Yes we lend money for repairs provided the total loan amount does not exceed 65% of the After Repair Value (ARV) of the property.  Repair money will be released in draws as you complete the renovations on your property.  

Can anyone live in the house during the course of the loan?

No, we only lend on non-owner occupied properties.

Do I need to have a property under contract before applying for a loan?

We can pre-approve you for our loan program prior to placing a property under contract.

Do you provide proof of funds letters?

Yes, provided you have been pre-approved.

Do you require a down payment?

Depending upon the buyer’s credit and financial strength, we can finance up to 90% of the total project cost (purchase, repairs/improvements, and closing costs) and up to 65% of the After Repair Value (ARV) of the property.  Borrower cash investment is 10-20% of the total project cost (minimum $6,000 down payment)

Can the points, closing costs, and interest be rolled into the loan?

No, the borrower must pay their own points and closing costs (i.e. seller paid closing costs are not permitted).  Interest payments are made monthly beginning on the 1st day of each month.

What closing attorney handles the loan closings?

Loans will be closed with Harlan and Associates, LLC.

Are there any fees or deposits prior to closing?

There are no upfront fees required prior to approving your loan.  Once we have approved your loan, we do require a title deposit with the closing attorney (Harlan and Associates, LLC) to order a title search on the property.

In order to complete your loan we must ensure that the property used as collateral has clean title.  Unfortunately this is a hard cost that must be paid prior to closing.  The deposit is simply a protection that the attorney will not be forced to pay for a title exam should you choose not to close your loan.  However, this money is only a deposit.  When you close your loan, the attorney will credit the entire deposit towards your closing.

How much are the closing costs?

Closings costs (including loan origination fee) are approximately 5% of the loan amount.  Closings costs will vary depending upon purchase price, loan amount, prorated property taxes, hazard insurance coverage, etc.