100 Percent Financing Loan Process
Residential Capital Partners offers 100 percent financing to qualified single-family real estate investors seeking funding for short-term rehab loans (fix and flip loans), long-term rental loans, or bridge rental loans secured by the borrower’s single-family real estate collateral.
ResCap is able to fund 100 percent of the purchase and repairs up to 70% of ARV because we are a balance sheet lender. We assume the full risk of each loan we write, and we carry it on our books until payoff—we do not sell loans to Wall Street or any other financial institution.
Our experience in single-property rehab along with our unique lending model gives us and our borrowers a competitive edge. We are not a hard money lender – we are your experienced industry partner, a private money lender with a firm commitment to your success. When you succeed, we succeed.
The ResCap Advantage
Keep cash in your pocket. Higher return on investments.
Our no-money-down loans allow our customers to keep more cash in their pockets while increasing their operating profit on every transaction. The majority of single-family private lenders limit their advance rates to 90% of ARV as a byproduct of their capital provider – Wall Street. ResCap does not limit our borrowers.
Let’s break it down:
On a typical $200,000 transaction ($150,000 purchase price + $50,000 repairs), ResCap will advance the Borrower 100% or $200,000 and require the Borrower to cover only the cost of the origination fee ($6,000), appraisal fee ($700), and the document preparation fee($1,000) – about $7,700 – at closing.
Unlike us, lenders that limit their advance rates to 90% of ARV require the Borrower to bring a 10% down payment ($20,000) plus closing costs ($7,700) or $27,700 to closing. If the lender limits their advance rate to 80% of ARV, the Borrower is required to bring a 20% down payment ($40,000) plus closing costs ($7,700) or $47,700 to closing.
At a 90% advance rate, the Borrower would only achieve a 24% return on the transaction. At a 100% advance rate, the Borrower can achieve a 39% return on the transaction. That’s almost 2x the return for the same risk. Plus, the Borrower kept more cash in their pocket for another deal or financial peace of mind.
Because the single-family rehab and rental investment property business is cash intensive, you invest substantial time and money finding new opportunities. Why strap yourself with a lender that requires significant down payments on properties that have already soaked up your time and hard-earned money?
100 percent financing completely turns the table on the conventional lending model. With ResCap, you put fewer dollars at risk while enjoying a higher return on those dollars at payoff. That BIG difference enables you to keep more of your hard-earned money in your pocket so you can invest in finding more opportunities while earning a higher return on your investment properties—100% of the time.
Flexible Financing That Grows With You
Residential Capital Partners funds 100% of purchase and 100% of repairs up to 70% of After Repaired Value (ARV). Most of the time, ResCap will begin its lending relationship with a new Borrower at a 65% of ARV Advance Rate. If a seasoned Borrower can show evidence of 10 closings during the last 12 months, ResCap will look to begin the relationship at a 70% of ARV Advance Rate. ResCap is always looking to deepen its relationship with and its commitment to its Borrowers.
New and experienced qualified borrowers can receive a fast approval of their Property Loan in two business days for amounts ranging from $75,000 – $1.25 million.
Fix and Flip Loan and Bridge Rental Loan Process
Apply for Credit
The first step in our process is to apply for credit on our website. You may apply for credit to get pre-approved based on your credit score and financial statement, with or without a property under contract.
There is no cost to get pre-approved. It takes just minutes to complete our brief online form, then you will receive a link via email to securely upload the following documents:
- Two most recent bank statements (Two full months)
- Be sure the following are present on both statements: Bank name, account number, name (or business name) and address, date range of statement, available balance, and list of transactions accompanying statement.
- If submitting prior to the 30th of the current month, we will allow a screenshot of the current month in order to show current standing of the account. This should be in addition to the prior two full months of statements with aforementioned details included.
- HUD statements from the previous two SOLD rehab properties
- Copy of current driver’s license
- Company documents for formed LLC. We specifically require the following:
- Operating agreement – must be fully executed
- SS-4 Form or EIN Assignment letter
- Articles of Incorporation or formation (depending on state and company type)
- Certificate of Good Standing (issued by the Secretary of State)
Upon receipt of ALL required documentation, we will review your application within 24-48 hours. You can expect approval as quickly as 3-4 business days.
Please note that we provide a Proof of Funds Letter upon request only.
Submit Property Loan Application – Receive Approval
Once you have been approved for credit and have a property under contract, you will need to complete the Property Loan Application found on our website. After completing the application, you will receive a link to upload all required documents including the original purchase contract and any assignment contracts, repair budget, photos of the house, and most recent bank statement (one) if it has been more than 30 days since the last were submitted. Invoice for desktop appraisal must also be paid prior to approval.
Once your application is approved, you will receive our Loan Term Sheet and our Closing Team will coordinate with you at this time to make sure all necessary documents are compiled and submitted to the title company as appropriate.
Close Property Loan
After approval, our closing team will contact you via email within 24 hours to provide next steps. This email will contain important instructions, including a request for you to choose/finalize your insurance preference and preferred title company contact. Prompt responses help ensure a smooth and timely closing, so keep an eye on your inbox.
Closing will be held at a title company or attorney’s office. Borrowers bring funds to closing to pay title insurance, property insurance, and any closing costs that exceed the ARV Advance Rate. Borrowers who qualify for closing cost reimbursement will still need to bring funds to closing and normal draw fees do apply to the reimbursement. By only paying fees at closing, you have 100 percent financing for the purchase and rehab of your property; a significant advantage that keeps cash in your pocket to invest elsewhere.
Post-Closing Services – Repair Draws, Payments and Payoffs
After closing, you will find it quick and easy to manage all your Residential Capital Partner loans using our online Borrower Web Portal. You will receive a welcome email that outlines how to set up your online account, as well as instructions for making payments, viewing your loan balance, requesting repair draws, and more. All loans are filed by property address, so you can manage as many loans as you have with a single login.
When using our Web Portal to submit for a Repair Draw. You will receive a link to Trupic which allows you to take and upload geolocated, time-stamped photos of the improvements. Prior to reimbursement, the Repair Draws must be complete with all invoices and photos of the improvements for which you are requesting reimbursement.
It is important to note, ResCap charges interest only on the outstanding balance of loan funds that have been drawn by the Borrower. We do not charge interest on repair budget items that have not been drawn by the Borrower.
When it is time to submit an Interest Payment, you will simply login to our Web Portal to submit payments via ACH. You may also set up AutoPay for automatic payments via ACH.