So Your Hard Money Lender Backed Out Because of COVID-19

Coronavirus has spread across the globe in rapid time, disrupting nearly every industry in its wake. House flipping is no exception. Real estate investors are now forced to navigate new challenges to secure funding. Banks are preoccupied and most hard money or private lenders are either sidelined, denying loans or raising interest rates and cash reserve requirements. The clock is ticking—what do you do?

Take a deep breath. You’ve landed in the right place.

Long before COVID-19 came onto the scene, Residential Capital Partners made the decision to run our business with refreshingly straightforward terms: No money down. 100% funding up to 70% ARV. 10% interest. 3 points rolled into the loan. 9-month term.

We’ve always prided ourselves on our transparency and now, more than ever, investors like you need a lender that can deliver on their promises, so you can keep making progress towards your goals.

So, true to our word, here’s a transparent look at what’s happening in the real estate flipping industry, and what you can expect from us:

Banks Are Experiencing Operational Challenges.

Conventional banks are tied up processing record numbers of homeowners seeking to refinance their home loans (up 474% from this time last year) as well as processing the wave of SBA Paycheck Protection Program Loan (PPP) and Economic Injury Disaster Loan (EIDL) submittals. Under normal circumstances, banks could process these loan requests and hire more officers to meet the demand. Under coronavirus circumstances, banks are managing the high workload with a remote workforce without hiring. Banks simply do not have the operational ability to handle real estate investment loans in a timely manner at the moment.

Residential Capital Partners is Built for Flexibility.

We are a hard money lender for investors—meaning you are our sole priority and have our full attention. Being smaller than a big bank also makes us more agile. Our staff is working remotely with great efficiency to get our investors the loan they need, when they need it.

Other Hard Money Lenders Are Changing Their Terms.

In the face of economic uncertainty, many hard money or private lenders are changing their terms. The advent of Coronavirus has been met with new cash reserve requirements by most lenders (6-months to 12-months of cash reserves) and increased interest rates that haven’t been seen in a decade (12% to 14%). These kinds of changes are offered up as measures of prudence in turbulent times, and while they may be precautionary in nature, they are also make a successful loan closing next to impossible. 

With Us, What You See Is What You Get.

We chose our slogan— “All Cash, No Catch”—as a direct response to the number of clients we serve that told us of their story with other lenders that ultimately resulted in “death by a thousand asterisks.”

Our terms bear repeating:

No money down. 100% funding up to 70% ARV. 10% interest. 3 points rolled into the loan. 9-month term.

 That’s it, every time.

Many Hard Money Lenders are Canceling Deals.

When the market fluctuates, many lenders will fluctuate with it — and cancel your loan if the forecast isn’t to their liking. They get borrowers in the door with a low interest rate—only to drop the deal at the slightest scare, spoil the deal and waste the precious time of their clients.

We’re Holding the Line.

We know your time is money, so we’re not going to waste your time. We only lend to investors making deals we believe in, that we have the funds to support. The market fluctuates—that’s a given. Our word will not. We’ve been in this game for over a decade and we’re making loans today the same way we made them yesterday.

If another hard money lender switched your deal or canceled your loan, bring it to us.
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