Case Study

The Client: Self-employed carpenter looking for funds to complete the renovations on three properties he owned.

The Property: Two single-family investment properties with two units in each property, and one single-family investment property.

The Exit Strategy: He was already pre-approved for a conventional refinance after the rehab of each property was complete.

The Finance: We did a blanket mortgage and gave him the funds needed to complete the renovations on each property.

Combined after-rehab value of the three properties: $400,000.00
Loan amount: $199,000.00
Term: 12 months
Payment: Monthly interest only

The Challenge: About three months into the project, the client became critically ill. Because he could not work, he was unable to complete the jobs for his current clients, and probably would not complete and refinance this project within the designated timeframe of the loan term. With his change in circumstances, he no longer qualified for a conventional refinance. We could not extend his term indefinitely and he needed a long-term solution to this unfortunate dilemma.

The Solution: The 30-year fixed rate mortgage program through one of our lending partners was the resolution. We extended his term three months and then refinanced two of the properties into the 30-year fixed rate program at 6.875% after qualifying factors were met. He had a positive cash flow and was generating enough rental income to sustain the monthly principal, interest, taxes and insurance payments on each of the properties. The third property is free and clear.