- Bay Area Capital Commercial Mortgage
Loan for Investors with multiple residential properties
This is we feel the industry’s best product for holders of large quantities of residential property, and is OK for condos, single family and 1-4 units, and is designed to help investors manage large portfolios of residential holdings that are not eligible for traditional Fannie Mae and Freddie Mac loan products.
Basically we take any number of residential properties, and bundle them together for underwriting, and then provide ONE LOAN secured against all these residential properties. You won't get a 30 year fixed loan, but you will get a great rate and all of those properties which were formerly residential loan financed are now financed with a commercial loan, leaving you with fewer properties financed by Fannie or Freddie.
This is a great tool for investors. It works well in cases where an investor wishes to refinance his private or hard money loans into a more manageable rate. It allows the flexibility for both “buy and hold” and “fix and flip” strategies. It allows cash out to (generally) 55-60% of the appraised value (or purchase price – whichever is less) without the complicated restrictions enforced by Fannie and Freddie.
Loan Amounts: $500,000 up to $5,000,000
Eligible Property type: Single family residence, condo or townhome, PUD, 1-4 unit property, in the states of California, Oregon and Washington
Loan terms: 30 year amortized; three to five year terms; possible prepayment penalties (but not on flips), 1 point broker fee,
LTV: 50 – 65% LTV (appraisal required for each property)
Rate: 5.5% - 6.75% depending upon strength of package, property and sponsorship
Requires: This program requires a complete set of income and asset documentation. A detailed schedule of Real Estate holdings is also needed. Credit, insurance, leases and property tax documents are also required. Strong to moderate sponsorship, strong resume, reasonable reserves are helpful.
Details: Works as a dual account set up, where investor has a “working account” with loans already in place secured to existing property, and then also a “reserve account” to hold funds set aside for new acquisitions. In this way, the “working account” is created and secured against property already owned. New property would be initially funded by client cash, but then “refinanced” at 50-65% of the purchase price (or appraisal value whichever less) with funds from the “reserve account” that are then designated as funds attached to the “working account” since this is a new property that you now own. In a similar way, if you sell a property that is secured by funds held in the “working account”, then the loan amount held in the “working account” will be paid off at time of sale, which then moves those funds from the “working account” to the “reserve account”. These funds can then later be extracted from the “reserve account” again to provide financing against a recently purchased property.