A Rehab Financial Group Success Storyon July 26, 2013 3:12 pm under Real Estate Investors
From time to time we like to present a success story that shows how an investment of time and patience can pay off for a borrower doing a rehab project. About a year ago, we were contacted by a potential borrower from Northampton County, P.A. seeking a loan to purchase a single family residence in a solid neighborhood. The house had lovely physical features, including an in-law suite and in ground swimming pool, but had been significantly neglected for a few years.
The borrower had an extremely high credit score, along with excellent income and cash reserves. He also had significant credit history, including many paid off mortgages. In short, he was the type of borrower that RFG desired to build a relationship with.
The purchase price of the property was $140,000 with rehab funds needed in the amount of $91,000. The ARV for the property came in $350,000. As RFG lends up to 65% of the ARV, the total loan amount was $227,500. On the eve of the closing in August 2012, a significant title issue was discovered, and it was impossible to close the loan. The title issue could be resolved, but would require the involvement of a court and would take several months.
The borrower chose to wait out the resolution of the title issue, and came back to RFG in November 2012, when the issue was finally cleared. The loan closed in late November. The borrower and his contractor worked quickly on the rehab, and did an excellent job. The borrower sold the property in late June 2013, making a handsome profit on the rehab. We have been contacted by the borrower about doing another loan with RFG.
Not all title issues can be cleared in just a few months. In fact, some may never be resolved, but it is important for a borrower to have an expert on their side to explain the issue and give them an honest assessment of whether it can be resolved within a reasonable time frame. In this case, the borrower is involved in the real estate industry and had an excellent title company working with him on this matter.
Some of the blogs you read on the website highlight the necessity of having excellent professionals on your side when entering into any sort of real estate transaction. This is just another example of how an important ally can help make your project a success, and how an investment of time and patience can pay off.
Please contact RFG so we can work with you towards your next successful rehab project!
Tags: Investing, Real Estate, Repeat Customers, Loan Approval