Tallahassee, Florida Hard Money Lender

Apr 5

Fix and Flip Loan Terms

Florida Rehab Loan

Location: Tallahassee, FL
Purchase Price: $75,000
Reno Amt: $185,800
Loan Amt: $245,800
Sale Price: $625,000
Actual Term: 16 mo.
Net Profit: $310,450
***Cash-on-Cash: 2069%***
Yes, you read that right, ***over 2000% Cash-on-Cash RETURN!!*** You may be interested in HOW that’s even possible. Well its not an annualized return, though even the annualized return is significantly higher than normal. The investor bought this house for $75,000. A single story, just under 1000 sqft, our investor DOUBLED the square footage by enclosing a porch in the rear, and then going vertical including the porch. The photos below tell the whole story. On top of that, some of you may be aware of a phenomenon called the “Path of Progress”. This is where the local government intentionally dedicates money toward an area as well homeowners are demanding much nicer properties than what is currently residing there. Our investor found a property at the right time, right place, and the right location.

Our investor, brought us a detailed plan as well as market evidence that this project was right in the path of progress. Armed with this information, along with proof of the investors history in doing these type of projects we decided to move forward in this loan. While the purchase price was relatively in line with what most properties were being sold for in the area, the finished project was significantly more expensive. Their trouble was that the lender they were considering using had their max LTV at 75% of ARV, but they also had a LTC of 80%. The shear cost of the renovation would have meant that the investor had to bring a sizeable downpayment to the table and they simply were looking for a better route. We provided 100% of the renovation as well only required 20% down on the purchase. Also our estimated ARV at the time of loan origination was NOT $625K but closer to $410 - $415K. This is one of those situations where Right, Time, Right Place, Right Location shines as an example of when an investors patience meets an opportunity!

Blue Bay Capital originally offered a 12 month bridge loan, at 11.65% APR. Our construction draws are always in arrears, which means the investor had to put money into the project first before we would reimburse them. We broke the project down into 6 draws with the first three draws being heavier in scope and costs. This ensured that the investor had more of their capital at risk in the project and ultimately kept us in a safer and less exposed position. The project did experience some hiccups and delays, however the delays (12 month to a 16 month term) allowed the investor to catch the wave of appreciation that was sweeping the area. This in turn worked out for their benefit tremendously. Blue Bay Capitals draw process is streamlined as well. The investor simply wrote us an email, requesting a draw and submitted their updated Budget. within 24 hrs the inspector scheduled the draw inspection, performed and provided a report to us within an additional 48 hrs and we approved and released the draws immediately. This investor was able to consistently request and finally receive their draws within 72 hours or less. This allowed them the ability to confidently plan and pay their contractor and subs knowing that their capital would be received in time, with no delays.

While the project did experience delays, and we did have to charge an extension fee for an additional 6 months, they came away with a win-win project and the end home buyer was extremely pleased. You can see more of the project photos below. If your needing a purchase and construction loan please reach out as we are always looking to build long term relationships with well qualified borrowers.