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CASE
STUDY – BERRO; as one example of our Fix & Flip Program
As we have always disclosed, The Rama Fund,
LLC (the “Fund”) has the right to a first look at
all of Athas Capital Group, Inc.’s (“Athas”)
production. If a deal does not fit within the Fund’s investment
parameters or if the Fund is fully invested, then we will offer
the investment opportunity to our network of private investors
as part of our Separately Managed Account (“SMA”)
program. Below we outline a deal we recently funded as an example
of our “fix and flip” bridge loan program.
Loan
Metrics
•
Loan-to-purchase ratio:
• Loan to current value:
• Loan amount:
• Value of collateral:
• Lien position:
• Other debt: |
24%
13%
$84,750
$655,000
1st lien
$0 |
•
Guarantor’s FICO:
• Full recourse/personal guarantee:
• Guarantor’s net worth:
• Current Yield to date:
•
Term of loan:
|
797
Yes
$4,523,000
8%
6 months |
Executive Summary
Our borrower is an experienced “fix and flipper.”
He has successfully renovated and monetized several properties
and in each case he operates as if he were going to live in
the subject property himself. His work is high grade and in
this instance he purchased the subject property for $360,000
using 100% cash. He then invested $50,000 more of his personal
savings into the property and before deciding to utilize a small
amount of leverage to help bolster his working capital as his
project neared completion.
The
Borrower / Narrative
Our borrower has been a firefighter for the past 21 years and
throughout his adult life he has been an astute investor. He
has accumulated a real estate portfolio valued at $4,655,000
with only $84,750 of debt against it (our bridge loan). His
credit is flawless and boasts a 797 FICO score. Additionally,
he earns $200,000 a year from his occupation.
Why
Conventional Financing Was Not an Option
The subject property was in substandard condition and banks
will not lend on that kind of collateral.
How
We “Won” the Deal
We were very quick to close this transaction and had money in
the borrower’s hands in less than two weeks. Additionally,
we enjoy an established relationship with the mortgage broker
who brought us this deal, having funded many loans for his clients
over the past several years.
The broker
that brought us this deal, we have serviced the needs of his
clients for years thus we are a trusted source.
Exit
Strategy for our Bridge Loan
The rehab work is complete and the subject property is currently
listed for $655,000. It is anticipated that this property will
sell within 3 months.
The
Collateral
- Located
in San Diego, CA.
- SFR of
1,577 square feet.
- 2
bedrooms & 2 full baths
Pictures
of the Subject Property as purchased:
Pictures
of the Subject Property once renovated:
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