2nd Mtg behind first of $520K
Funds Needed: $100k
Loan Position: 2nd
Interest Rate: 12%
LTV: 65% of ARV
Amount of Equity Securing Investment: $330k
SFR Rental Property Purchase – Newly renovated 4bed 2 bath sfr. New value estimated @ $175,000. Lease in place at $2K monthly. 4 sale now at $162,000
Funds Needed: $100k
Loan Position: 1st
Interest Rate: 10%
LTV: 60% of ARV
Amount of Equity Securing Investment: $70k
A unique property development for projected 167 units in the French Quarter of New Orleans. Purchase $60M for the entire block of real estate along with hotel lease for x amount of years. (x = to be negotiated between 25 and 99 years.)
Value after entitlements is reported to be $100M. Seller is offering to spend $95K on architectural submission to the city upon valid accepted offer prior to closing escrow to determine the exact amount of units the city will allow.
Add historic credits around $20M and this seems like a Hot deal for the right parties.
Funds Needed: Proof of funds required to make offer.
Loan Position: Purchase – New Development
Amount of Equity Securing Investment: $40M
It’s a simple term referencing as a blanket covers everything (or everyone) under it, in the world of mortgage finance when a single loan is secured by more than 1 property, then those multiple properties, it could be said, are covered by that blanket loan.
Wrapped in a blanket all warm, cozy and snuggled in. hmmm, Here is another simple analogy. The multiple properties are wrapped in that one blanket loan.
The variety of entities that can benefit from this specific loan product is diverse. From Mom & Pop with a couple rental houses or commercial place of business and a rental or two. Investors with rental properties whether a few or great many properties (This is portfolio lending), Real estate trusts, investors, corporations, developers who subdivide land into parcels and the list goes on. The largest of these players in the real estate field lately are the ones who have scooped up thousands of single family properties at auctions and in bulk from banks and Freddie Mac / Fannie Mae caused by the most recent real estate meltdown and turned them into rentals.
So who will finance these blanket / wrap loans?
Here we have another diverse list: Your local savings and loan bank for mom & pop, to local commercial banks for their relationship clients all the way up to wall street money for the big guys (and girls).
Now it’s not just residential properties and land these will cover!
Multi-family apartment buildings to commercial properties are also prime candidates.
Benefits and drawbacks come with the territory so stay awake under that nice warm blanket for a moment longer while we touch on some of these topics. First of all, it takes some investigating and doing your homework before you go and get under one. Its always smart to consider if you getting under a blanket alone! Because once you put multiple properties under one loan with partners or loved ones, it has even more implications.
While some lending sources require that the properties be held in an entity such as an LLC or Corporation it’s not always the case. And don’t forget to ask, “recourse”? *personally liable* or non-recourse *hey man, don’t look at me if it all goes to hell!
As with any financial decision, you should get good council after you do your first round of inquiries on your own with an experienced loan person (banker &/or broker) your tax person and a real estate attorney so the end result is not a SURPRISE! Some of the simple benefits are the fact that you only have one escrow, and loan to pay for and keep track of. Grouping multiple properties can also benefit to allow to cross collateralize in purchase and refinance situations allowing a or properties with more equity overcome shortfalls of equity poor properties or even reduce / eliminate the need for a down payment on the purchase of additional property. And yes, you can combine a refinance with a purchase simultaneously. Fun stuff huh? But on the other side of the coin, once you put properties together, unless you have predesigned release clauses in the note and deed you may find one or more properties stuck together in the wrapper (pun intended) when you want one or some out!
Need a blanket loan? I’m here to help solve your real estate financing! Please visit my website @ ifundre.net or contact me directly via email- firstname.lastname@example.org.
Eight Estate Lot Analysis
Total After Entitlements 8 Lots 36 Acres
Cost of Property $5,200,000.00
Cost of Development $2,600,000.00
Total Cost Lots only $7,800,000.00
Retail Selling Lots only $20,000,000.00
Gross Profit Lots Only $12,200,000.00
Cost of Property & Entitlements $7,800,000.00
8 Spec Houses Construction Cost $24,000,000.00
Total Cost with Houses $31,800,000.00
Retail Sale of 8 spec homes @ $7M ea. $ 56,000,000
Gross Projected Profit if build out all 8 spec houses $ 24,200,000.00
When applying for a home loan, lending institutions will look into your capacity to pay for such loan. Banks and other private money lenders do not just give away their money when you need capital for a home loan. They will require so many things from you and it is important that you comply with these requirements to be able to qualify for such loan. One of the things banks and private lenders look into is your credit score.
What is Credit Score?
Credit score is a numerical expression that represents the creditworthiness of an individual. This is important to lenders because the credit score predicts the person’s capability to pay for a loan. Credit scores also reveal an individual’s potential risks.
Credit scores are calculated by various businesses. If you are applying for a home loan from a private lender, the company will gather all information related to your credit history or credit report. Details in your credit report are gathered and compiled by credit bureaus (Equifax, Experian, and TransUnion) which are then used by lenders to calculate your creditworthiness (usually under the FICO method).
How to Improve your Credit Score?
As mentioned, banks and private money lenders look into your credit reputation before you can apply for a home loan. These institutions want to know that you are good in settling obligations. It is important to them that you have the capabilities to pay such loan without delay. To know more about improving your credit score, here is how lenders calculate your creditworthiness.
Based on that information, it is really easy to boost your credit score. Here are 7 tips that will give you a good credit rating.