SOUTH PHILADELPHIA SUCCESS STORY

SOUTH PHILADELPHIA SUCCESS STORY

          From time to time, we would like to share success stories of RFG customers.  One such story is as follows.  RFG was contacted in January by two brothers in law that had purchased a vacant lot in South Philadelphia for $30,000, who were seeking funds to build a house on the property.  While it was a big project, the borrowers were well capitalized, had significant building and rehab experience, and already approved building plans and permits.  Once they had the foundation poured and the underground utility hookups installed, RFG was ready to lend.

In late February, the borrowers closed on their RFG loan in the amount of $160,000.  The “after repaired value” (ARV) of the property was $288,000, giving a comfortable loan to value ratio of 55.5%.   The borrowers immediately began building the house on the property, taking 6 draws as work was completed.  RFG’s inspector, who did the initial inspection and each of the 6 draw inspections, always commented that the quality of the work and the materials used were excellent.

The property was substantially finished in May 2012, (in only three months) and put on the market for sale.  In very short time, the house was placed under contract of sale for $307,000 with a 3% seller assist, netting the seller $297,790.  The sale closed in late June 2012 and RFG’s loan was paid off.

Even adding in the purchase of the property, closing costs and estimating carrying costs, and costs of sale, the borrowers earned approximately $75,000 for their four month investment in the project.  Pictures of the project from beginning to end are found below.

The moral of this success story is that even in this difficult real estate market, work that is well planned out, well managed and well done will likely result in a successful project and money in the borrower’s pocket.  Contact us at RFG to see how to make your next project our next success story.