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) or rental bridge 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 the single-family rehab and rental industry over the past 10 years gives us the ability to fund 100 percent of purchase and repairs up to 70% of ARV. We are more than a hard money lender. We are your experienced partner, a private lender with a firm commitment to your success. Our success depends entirely on your success.
The 100 Percent Financing Difference
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.
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.
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 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.
100% Financing Advance Rate
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 less than 15 minutes to complete our brief online form and upload the following documents:
- Most recent one-month bank statement
- Last 2 HUD statements from previously sold properties
- Copy of most recent tax return
- Copy of current driver’s license
- Consent to perform credit and background check
Receive ResCap Proof of Funds Letter
Using the information you submit, we will run your credit with a soft pull that does not affect your credit score. We will use your credit score and the additional documents to assess your financial strength and industry experience in order to provide you with a ResCap Proof of Funds Letter.
As an example, our typical Proof of Funds Letter might state that you have been approved for $250,000 or one deal in your market for a property that requires low to moderate repairs. If you have more experience, your Proof of Funds Letter may state that you have been approved for $500,000 or two deals. We have many ResCap Borrowers with Proof of Funds Letters providing them with lines of credit up to $1,000,000 or more.
Whatever your experience level, your Proof of Funds Letter will help you so you can look for your next investment property confidently, knowing you have a partner ready to fund your deal.
Submit Property Loan Application – Receive Approval
Once you have put a single-family rehab and rental property under contract, come back to our website to upload the contract, the repair budget, photos of the house and a list of comparable investment properties within a ½ mile radius of your subject property. We will evaluate this information and make our decision within 48 hours. Most of the time, our decision is for approval.
Next, you will receive our Approval Letter along with an invoice to order the appraisal of the property. Once the appraisal is ordered, our Closing Team will coordinate with you to make sure all necessary documents are compiled and submitted to the title company for closing.
Close Property Loan
When we receive a valid appraisal confirming the value of the property, we will assemble all necessary documentation, clear title and evidence of insurance to close the loan. On average, a submitted loan can fund within 14 days of you receiving an Approval Letter.
Closing will be held at a title company or attorney’s office. Borrowers bring funds to pay title insurance, property insurance and any closing costs that exceed the ARV Advance Rate. The Borrower may roll all closing costs into the loan if there is ARV room.
When you have clear title, a completed appraisal and insurance on the property, we can wire funds within 24 hours. The loan interest rate is 10%. The $1,000 document preparation fee is due at closing along with an origination fee of 3% of the loan commitment. By paying only for fees at closing, you have 100 percent financing for the purchase and rehab of your property.
Post-Closing Services – Repair Draws, Payments and Payoffs
Following closing, you will find it quick and easy to manage all your Residential Capital Partner loans using our Online Account Portal. All loans are filed by property address, so you can manage as many loans as you have with a single login.
When it is time to submit for a Repair Draw, Borrowers submit Repair Draws using our Online Account Portal. The Repair Draws are complete with invoices and pictures of the improvements for which the Borrower is requesting reimbursement. Once received, ResCap sends an inspector to the property for $150 to verify that the improvements have been made before reimbursing the Borrower. Once confirmed, ResCap reimburses the Borrower net of the $150 Inspection Fee via direct deposit in the Borrower’s bank account the next day.
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, Borrowers login to our Online Account Portal to submit payments via ACH. Borrowers can also set up AutoPay in the Online Account Portal for automatic payments via ACH. Borrowers can review payment invoices, payment reminders, Repair Draw history or their current loan balances in the portal.
When it is time to payoff your loan, Borrowers login to our Online Account Portal to request a Loan Payoff Quote. The Loan Payoff Quote is instantly calculated, at which time, the Borrower can schedule their loan payoff easily online. There are no pre-payment penalties on a loan that is paid in full prior to the expiration of the term of the loan.