Types Of Loans:

Construction/Renovation Loans:
A commercial investor/rehabber can use a private loan as a lending tool for financing when he/she only plans on holding the investment property until the construction or rehab work has been completed and the property goes to sale. A construction loan will typically be disbursed in increments as a borrower needs funds to complete construction of the property. Once a property has been constructed and/or renovated and sold for a profit, the loan with the private lender is paid off in full or gradually in consideration of a private lender partially releasing some of the collateral. The typical maximum loan-to-value allowed on a subject property is 80% with disbursements made to a borrower pursuant to the terms and conditions of a construction holdback agreement signed at closing.
Bridge Loans:
A bridge loan is a short-term loan which acts as a “bridge” loan for a borrower who typically is in the process of refinancing between one conventional loan to another. A bridge loan is useful when a borrower needs financing for a short period of time where obtaining a long term conventional loan with a fixed rate doesn’t make sense (i.e. sale of the property is imminent) and in instances where there will be an extended period of time before a conventional lender is ready to close on a new loan. The typical maximum loan-to-value allowed on a subject property/collateral is 80%. Lenders will often require documentation that the property is under agreement to be sold or that a commitment letter has been issued from a conventional lender.
Acquisition/Purchase Loans:
A private loan can be used to purchase real estate when a borrower fails to meet conventional bank standards or does not have time to wait for a conventional lender’s notoriously slow underwriting and closing process. Private loans for purchase allow for borrowers with low, bad or no credit to acquire property. The typical maximum loan-to-value allowed on a subject property not purchased at a foreclosure sale is 80%. Loan terms are from 1-2 years.
Cash-Out Refinances:
Cash-out refinances allow a borrower to extract equity from real estate already owned in order to get a “cash out” and/or to liquidize some capital. It is often a useful investment tool as it can quickly generate additional working capital for other projects. The typical maximum loan-to-value allowed on a subject property is 70%.

General Lending Parameters:

Property Types:
Non-owner occupied residential; commercial; all income producing properties; rehab properties; ground-up construction; land.

Lending Area:
Massachusetts, Rhode Island

Loan Size:
$75,000 to $3,000,000

Loan Term:
6 – 12 months (longer terms accommodated through extensions)

Monthly Payments:
Interest Only

Interest Rates:
12-14% per annum

Loan to Value:
Land Only – Up to 60%
Property Acquisitions – Up to 80%
Cash-out Refinances – Up to 70%

Commitment/Origination Fee:
A Commitment/Origination Fee of 3% of the total loan amount, due and payable at closing

Prepayment Penalty:
No Prepayments Penalties

Commitment/Origination Fee Deposit:
A Commitment/Origination Fee Deposit will be required by the Borrower upon execution of the commitment letter to cover Lender’s up front due diligence fees and costs. This is not an additional fee and will be applied to the Borrower’s closing fees and costs.

Due Diligence:
Inspection/appraisal, internal review, title report – satisfactory in all respects to the Lender

Mortgage Position:
1st Mortgage Position

Broker Fee:
When applicable a broker fee of the greater of 1.5% of the total loan amount or $1,500.00

Turn Around Time To Close:
7-14 days from receipt of signed commitment letter. In a short period of time your financing needs will be resolved!!