Gelt Financial has established itself as one of the leaders in
Investor-Rehab loan financing.
How to finance an investment property with no money down
OK... So you found the perfect property that you want to invest
in.... Now, how do you buy it with no or very little money down...
STOP
Here's the most important thing... We have to figure out what the
spread is. (spread equals discount below market value) There's a
spread right? If a property has a market value of 100,000... Anyone
can pay 100,000 for it... The true real estate investor is going
to get it for less. The degree of ''less'' is the spread or profit
for you, the investor. If you're paying market price for a property,
this is probably not the program for you.
Below is a link that will enable you to figure out the approximate
profit or spread on a property.
Gelt
Financial is one of only very few lenders to offer Rehab Financing,
a loan targeted exclusively to the rehabilitation of properties
in need of repair.
What is your Down Payment?
•
You
make absolutely no down payment as long as your loan amount
is no higher than 65% of the ARV [After Repair Value].
Gelt
considers the following property types as acceptable collateral:
commercial and industrial properties, non-owner occupied residential
properties, loans in corporate names, offices, mixed use properties
and warehouses.
What properties don't
we consider?
•
Residential
owner-occupied properties.
How do we determine the
appraised value?
•
Easy.
We send out an independent appraiser who is familiar with
real estate in your local area. You give the appraiser an
itemized list of repairs and improvements that you'll
make to the property. The appraiser then determines the property's
current and future value after all the repairs are made.
What are the terms?
•
The
terms of Gelt's Balloon Loans are usually 12 months.
Amortizations are flexible. Sometimes 20 years.
Sometimes interest only payments. Or sometimes no payments
at all. It depends on you experience and the property.
•
Alternate
One:
If you decide to rent out the property instead of selling
it, we will give you a long-term permanent loan at a much
lower rate at no additional cost.
•
Alternate
Two:
If you need a longer than expected time to fix up or sell
the property, we'll extend the loan.
Can the deed be held
in a corporate name?
•
Yes.
You can hold the deed as a corporation, LLC, partnership or
individually.
What if the property
doesn't need any repair?
•
That's
fine. Gelt will still offer you a loan base the loan
to value (LTV) off of the appraised value as opposed to the
purchase price. So, if you're buying the property
at a discount, you can still do it with No Money Down!
Also we can offer higher LTVs and lower interest rates
on properties in good condition.
What else do I need to
know?
Time
Frames:
Approvals
--usually within the same day.
Closings --as soon as we get the appraisal and title report.
Your whole start to finish process is fast and smooth.
Loan
Amount:
Maximum--$1,000,000
Costs:
Typical
rates for this program are 9-15% interest with 3-5 points
up front and 0 -3 points on the back end. Rates and
fees are determined by your credit, your experience, and the
property.
Disbursement:
At
closing, we advance the purchase price and the 1st
draw to get the repairs started. As you make more repairs,
we disburse more money. It's typically in 4 installments.
Creditworthiness:
Our minimum credit score for rehab loans is 620.
Eligible
Locations:
PA,
NJ, DE, MD, & FL
So
here's a practical example of a rehab loan....
An investor can buy a distressed single family property for $45,000,
He believes that he can fix it up to salable condition for $40,000.
When the properties done, it should be able to sell for about $145,000.
In
this case... we'd
loan the borrower up to $94,250 which is 65% of
145,000!
