- We're really firm on
the collateral being in,
what I call the curbs and gutter theory.
We're not real big on rural
or cabins or horse ranches
or things of that nature or land.
We don't do any land, but we're real heavy
on the typical three
bedroom, you know, two bath,
or four bedroom, two bath
single family residence located
in a community.
We're all over California
in metropolitan areas.
We will loan up to 90%
of the acquisition cost
and up to 100% of the rehab,
and that's a pretty
actually standard process.
Most of our loans that go
out of here are 85 to 90%
of the acquisition cost,
and we typically fund 100%
of the rehab cost if
there is a 30 or 40,000,
$50,000 simple rehab.
If the rehab is extensive,
anywhere in the 100
to $200,000 range, we might
back off that a little bit
and go down to 70 or 80%,
but for the most part,
most investors who come here
or that have some experience
and have decent credit
can expect to get 100 to,
I'm sorry, an 80 to 95% loan to purchase
as well as 100% of control funds.
- [Rocky] So if I'm a borrower I just have
to bring in about 10
to 15% of the purchase?
- Absolutely, our typical
investor will put down anywhere
from five to 15%, maybe 10%
of the acquisition cost,
and if they prefer 100%
financing on the rehab cost.
We go up to about 75% of
the after repair value,
and up to, again, 90%
of the purchase price.
That's kind of our rule of thumb.
In special circumstances,
we can vary on that,
we're pretty flexible.
We do have our own cash and
we do make our own decisions.
We don't report to anybody, so
if there's a bona fide reason
that we need to move a little
bit on those, we can do that.
Our minimum loan amount is $50,000,
and we'll go up to $2,000,000.
We do a lot of loans in
the 1.6, 1,800,000 maybe
in the Bay Area or southern
California, Orange County
or coastal regions, typical.
We can even do a $3,000,000 project.
It's a little bit more due diligence
and a little bit more underwriting.
Our typical loan is anywhere from 50.
A lot of out-of-state are
done in the 50 to 70,000.
We do a lot of 50,000, 60,000 in Michigan
or some of the other states.
With the water damage
and the floods in Texas,
we've done a lot of 50
and $75,000 short-term,
small loans there.
California, our average is in
the three to $400,000 range,
but again, anywhere from
50,000 to 2,000,000 is kind
of our sweet spot, and
that's where we tend to focus
and do a lot of deals.
- [Rocky] And on a smaller deal like that,
what would be your minimum fee?
- Our minimum fee is $2,500.
We don't see that too often because most
of our transactions are
at an acquisition price
where it's just our normal customary fee.
The only time we have the
minimum that we usually penetrate
is probably gonna be in your
low property value states,
Michigan and Tennessee or even
some of the flooding zones
of Texas where they're
picking up properties
at rock-bottom prices right now.
That's where our minimum fee comes in,
but it's not very prevalent.
Less than two to 3% of our
transactions fall in that bucket.
- [Rocky] Do you have any
experience requirements?
If I'm a first time real estate investor,
would you do business with me?
- Rocky, that's a great question.
We'll work with anybody.
We'll work with beginners, intermediates,
and even the experts, all
of them are welcome here.
If it's a true beginner
with no experience,
we might require maybe
another five to 10% down,
but we have no problem
working with beginners.
Our sweet spot is the
investor who does four
to six properties a year, they're kind
of a hands-on investor,
they're really familiar
with their area, boots on the ground,
and they're very experienced
in their geographical region.
That's really our sweet spot.
An investor who does a
couple of these a year,
part-time or full-time basis,
that's got a little bit
of capital, that's very
familiar with their region,
they're a real estate agent,
they're a contractor by trade
or whatever, they can expect
to slide through our process
at a pretty fast pace.
Have their loan closed
typically in a week,
maybe a week and a half at most.
