REI Capital Resources has gap funding available for short term (30 days) situations. The funds are available for properties in the Austin, DFW, Houston and San Antonio metro areas. The primary purpose of this type of funding is to assist the investor in securing a property in a very short period of time, typically 2-3 days. The investor’s strategy is to obtain control of the property thru this loan, begin paperwork to refinance the loan immediately and eventually complete the rehab of the property for sale.
An assignable contract is offered for sale by an investor or real estate firm. Either the time to close or the competition or both are in play. The investor needs to secure financing rapidly to gain control of the property. Only 2-5 days are allowed in the contract to secure funding or the investor loses their non-refundable deposit. A gap loan can fill this strategic need within the allotted period of time.
As with most property owners who are in the foreclosure process, a substantial number are in denial. This denial causes them to wait till the last week or so or even days before the foreclosure sale to act on saving their credit. The investor has convinced the owner to sell the property, usually at a severe discount and has promised a quick close. Control of the property has been locked up thru the purchase contract. The competition for the property is extremely high and another investor is sitting in the wings waiting to obtain the property. The initial investor needs to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days. A gap loan to purchase the property will allow the investor to purchase the property while they are in the process of obtaining a rehab loan.
Terms and Conditions
|Maximum Loan Amount:||$500,000|
|Minimum Loan Amount:||$ 50,000|
|Points (due at closing):||3%|
|Payment:||Lump Sum Payoff|
|Time to Close:||~2-3 days|
|Title Insurance:||Paid by Borrower at closing|
|Lender Position:||First Lien Only|
|Fees (due at closing):||$495 (Doc Prep)|
|Other:||Full Recourse Loan
Personal Guarantor Required
Limited to the Austin, DFW, Houston, San Antonio Metro areas