Loan on a Flip. We are always seeking those who wish to loan money in second position on real estate. You will earn 21% interest, flat rate. Loans are based on a specific time period and due and payable at that time. If we sell the property before the due date, you are still paid as if the payment took place on the final pay off date.
How it Works:
We identify a home that we plan to flip. We secure a first loan between 80-90% of the value of the property. You provide a second loan to cover the difference plus the costs of the payments for the term of the loan. Thus if a home costs $80,000 to buy and needs $20,000 in work to be able to sell and will take four months to complete and sell.
We borrow $85,000 (between $80,000-90,000) from our primary lender. Monthly payments for this amount would be $1,062.50 per month. We then would borrow from you $15,000 + $4,250.00 at 21% interest for four months.
All proceeds are handled through the primary lender. Your $15,000 second are held in escrow by the primary lender and construction costs are reimbursed as construction is completed. We also pre-pay the $4,250.00 to the primary lender so you know there is NO chance of foreclosure throughout the term of the loan.
You are paid at the completion of the loan. For instance, if the house sold 60 days after purchase, you would be repaid $1,347.52 in interest, plus your principal of $19,250.00 on the day escrow closes successfully on the final sale of the property.
You are provided a deed of trust in second position behind the primary lender for your money. The document is recorded with the County Recorder's Office thus making it impossible for the property to be sold without your being repaid. You are only subordinate to the primary lender.
Jim Lord is a member of Real Estate Consultants, LLC. Real Estate Consultants, LLC. is a flip company. Jim has personally performed over 100 flips in the Phoenix market and continues to actively invest in the real estate market.