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Rehab Financing
What is Rehab Financing?
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Gelt Financial is one of only very few lenders to offer Rehab
Financing, a loan targeted exclusively to the rehabilitation
of properties in need of repair. |
What is your Down Payment?
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You make absolutely no down payment as long as your loan amount
is no higher than 65% of the ARV [After Repair Value]. |
What properties do we accept as collateral?
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Gelt considers the following property types as acceptable
collateral: commercial and industrial properties, non-owner
occupied residential properties, loans in corporate names, offices,
mixed use properties and warehouses. |
What properties don’t we consider?
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Residential owner-occupied properties and new construction. |
How do we determine the appraised value?
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Easy. We send out an independent appraiser who is familiar
with real estate in your local area. You give the appraiser
an itemized list of repairs and improvements that you’ll
make to the property. The appraiser then determines the property’s
current and future value after all the repairs are made. |
What are the terms?
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The terms of Gelt’s Balloon Loans are from 6 to 12 months,
with amortization up to 20 years. |
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Alternate One: If you decide to rent out the property
instead of selling it, we will give you a long-term permanent
loan at a much lower rate at no additional cost. |
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Alternate Two: If you need a longer than expected
time to fix up or sell the property, we’ll extend the
loan. |
What else do I need to know?
| Time Frames: |
Approvals --usually within the same day.
Closings --as soon as we get the appraisal and title report.
Your whole start to finish process is fast and smooth. |
| Loan Amounts: |
Minimum --$25,000
Maximum--$250,000 |
| Costs: |
Typical rates for this program are15% interest with 5 points
up front and 3 points on the back end. |
| Disbursement: |
At closing, we advance the purchase price and one of the draws.
As you make repairs, we disburse the rest. |
| Creditworthiness: |
While we don’t base our loans on our borrowers’
credit scores, you must show a credit history that convinces
us that you will pay us back. |
| Eligible Locations: |
PA, NJ, DE, MD |
So here’s a practical example
of a rehab loan....
An investor can buy a distressed single family property for $45,000,
He believes that he can fix it up to salable condition for $40,000.
When the properties done, it should be able to sell for about for
$145,000.
In this case... we’d loan the borrower up to $94,250
which is 65% of 145,000!
In other words...
We’d give him:
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the 45,000 to buy the property |
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the 40,000 to fix it up |
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plus any money for closing costs... |
He wouldn’t need any of his own money!!! |
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