Joint Venture

We have a unique and exciting 100% loan funding opportunity tailored specifically for fix and flip ventures. This is an exclusive opportunity to partner with us as a guarantor and joint venture partner for split equity on the project and a great way to reduce upfront costs when funding a deal. 

To summarize our Fix and Flip loan programs, our lender offers Standard, Premium and Platinum tiers.

Standard is what our lender offers to any borrower, regardless of credit or experience:

~90% Purchase Price, 100% Rehab Costs, 0% Closing Costs (Up to 65% ARV for no experience. Up to 70% ARV for 2+ fix and flips under your entity names in the last 2 years -HUD Statements required prior to closing).

Premium is what we have negotiated with the lender to offer borrowers when they partner with us in a Joint Venture in the deal:

~100% Purchase Price, 100% Rehab Costs and 100% Closing Costs (up to 70% ARV).

Platinum is what our lender can offer a borrower that can show at least 8 fix and flips under their entity names in the last two years or after they have completed 4 loans with our lender (HUD statements required prior to closing):

~100% Purchase Price, 100% Rehab Costs and 100% Closing Costs (up to 75% ARV).

Please note that the maximum loan amount based on ARV (65-75%) is often less than the cost of the purchase, rehab and closing costs so the balance is required to be funded by the borrower at the closing of the loan. Ask us to send you a Loan Cost Estimator calculator that you can use to estimate your closing funds for these 3 tiers, based on your Purchase Price, Rehab Cost and ARV numbers. Here’s a quick example: Purchase Price $200,000, Rehab $25,000, ARV $360,000 Standard loan tier closing funds = $43,400; Premium loan tier closing funds = ($1,800); Platinum loan tier closing funds = ($18,000) In this example… Would you rather bring $43,400 cash to close the loan or $0 cash to the loan closing and simply split the equity with us after the sale?

Loan Process

1. **Deal Initiation:** You secure a deal under contract, obtain an itemized bid from a licensed contractor detailing the repair costs, estimate the After Repair Value (ARV), and pull title for the property. Note that the max we can lend is the FHA Cap for the County where the property is located. Here is a link to see what the FHA Cap is in your County: https://entp.hud.gov/idapp/html/hicostlook.cfm

2. **Deal Submission:** Provide us with all the pertinent details including Purchase Price, Rehab Costs, ARV, Credit Score (600 min), Cash Reserves, Available Credit, and Experience over the last 2 years (HUD Statements with Entity Name for properties purchased and sold are required before closing).

3. **Evaluation:** Our lender’s loan analyst evaluates the deal and prepares a comprehensive loan estimate. Note that they will provide us with a Standard loan estimate and a Premium 100% financing joint venture estimate. Our Standard is 90% Purchase, 100% Rehab, 0% Closing Costs and Premium is 100% Purchase, 100% Rehab, 100% Closing Costs. Both options are up to 70% ARV or 90% LTV. (Note that loan amounts, rates and terms are based on the experience and credit score of the borrower. So the more experience in the last 2 years and higher credit score the higher the loan amount and better the rates and terms are) 

4. **Agreement Preparation:** If the deal meets our criteria for 100% funding, we proceed to draft a split equity agreement and form an LLC for the venture based on our agreed terms. Alternatively, if it doesn’t meet our criteria, we will offer our standard loan estimate for approval by you.

5. **Documentation:** Once terms are agreed upon, we commence the application process and will need the contractor’s bid and scope of work to order an appraisal to confirm the ARV. Note that you can choose from a hybrid appraisal for around $550 or a full appraisal that can often come in at a higher value and will cost around $750. After the updated loan estimate from the lender, based on the appraisal, is approved we will gather all necessary loan documents for processing and underwriting.

6. **Rehab Process:** Our lender’s underwriting team sets up a draw schedule for the rehab. Upon loan closure, you will handle the initial rehab down payments. Upon completion of each milestone you will submit an inspection request and lien waiver to our lender. Our lender sends a third-party inspector to confirm completed work and then will reimburse the corresponding rehab draw so you can pay for the next phase. This process will continue until the rehab is completed and any remaining funds are reimbursed at payoff of the loan.

7. **Holding Costs:** You are responsible for all closing funds, loan payments, holding costs and rehab down payments incurred throughout the process.

8. **Property Sale:** Upon completion of the rehab, you will stage and list the property for sale.

9. **Equity Payout:** After the property sale, we distribute the remaining equity according to the joint venture terms outlined in the split equity agreement.

This outline encapsulates the fundamental process, though variations may occur depending on individual deal scenarios. We have created a Loan Cost Estimator that we are happy to share with you as a resource to estimate loan amounts, closing costs, closing funds and net profit based on the Purchase Price, Rehab Costs and ARV. Should you have any queries or require clarification on any aspect, please don’t hesitate to Contact Us or take a look at our FAQ’s. We look forward to partnering with you to advance your next project forward!