Our Lending Program
We offer funding of up to 90% of the purchase price and 100% of the construction cost. Our Maximum Loan to Value is 65% of the After Rehab Value (ARV). If you have a loan that doesn't fit this criterion, we are still happy to discuss options with you.
How We Fund and Max Loan to Value
On fix and flips and buy and hold deals, we aim to fund 80-90% of the purchase price and then 100% of the construction costs. In this case, if your purchase price is $100,000 and your rehab is $50,000, we will fund $80,000 - $90,000 for the purchase price and then $50,000 for the rehab. Therefore, you would need to bring $20,000 to the closing, in addition to points and closing costs. We cap our loans at 65% of the ARV. For example, if your project has an ARV of $1,000,000, the most that we can provide is $650,000. This number however is only an upper limit. We will still want to see you put money into the deal or “skin in the game”.
How We Determine Value
In order to confirm the ARV, we have all properties professionally appraised. Once the appraisal is complete, our team reviews the appraisal and decides how much we can fund. The borrower pays for the appraisal and whether we decide to fund it or not, the appraisal will ultimately be yours to keep.
Who We lend to
All of our loans must be made to LLCs. Unfortunately, we are not able to lend to individuals.
Minimun and Maximum Loan Sizes
Our minimum loan size is $75,000 and our Maximum is $25,000,000. This combines both purchase price and construction costs.
How Construction Funding is Dispersed
After closing, construction funds are dispersed in accordance with the draw schedule that you submit. To put it another way, you will let us know how you would like for the job will be broken up prior to closing and then once you’ve completed a phase, we will confirm that the work has been done and wire you the funds. This means that you will need some funds set aside to cover initial construction costs until you are reimbursed. Inspections are typically conducted by licensed appraisers and there is a fee of $225 for each inspection. We can typically be flexible to changes in the draw schedule. The important point is that we are only able to reimburse work that has been completed.
Rates and Points
Our rates are typically from 9-12% with 2-3 points paid at closing. Rates vary based on borrower experience, the volume of deals, the type of property, and the location of the property. All of our loans are interest-only with the principal being repaid through either a sale or a refinance. To give an idea of how the numbers break down, assuming a $100,000 loan with no construction, at a rate of 10 and 2, the borrower will owe $2,000 (in points) at closing and then $833.33 a month in interest payments ($10,000/12 Months). If it takes a year to sell the property, your cost of capital will be 12%. If it only takes 3 months, your cost of capital will be 4.5% (there is no pre-payment penalty for our loans). If construction is being funded, monthly payments will increase as funding is dispersed.
Funding Process and Timeline
Initial Consultation: Real Estate Investor speaks with a Jasey Capital team member to review the deal, their past experience, and the loan terms that Jasey Capital can likely provide.
Order Appraisal: If we believe that we can fund the deal, we will order an appraisal to confirm the value. If work is being done to the property, the appraiser requires a scope of work.
Submit Application: Once the appraisal has been ordered, the real estate investor will be asked to fill out and sign the Jasey Capital Application. Assuming the appraisal comes back at a sufficient value, the appraisal and application will be sent over to our underwriting team. At that time, we will run the background and credit of all loan guarantors.
Underwriting: Once we have received the appraisal and loan application, our underwriters generally require 24-48 hours to reach a funding decision.
Letter of Intent: Once it is determined that we are able to fund the deal, we will send the borrower a letter of intent to fund. The letter of intent will cover the terms of the loan including the rate and points and the amount that we are able to fund.
Review of Title: The borrower will provide the Title Report to Jasey Capital’s attorney for review. Assuming there are no issues, the process will proceed.
Closing: Once the title has been cleared by our attorney, we will set a date to close.
Time Required to Close
Our funding process typically takes 10 Business Days from start to finish. The duration of the process depends largely on the speed with which the borrower sends over the required documentation. We can sometimes close faster than 10 days, but on a case-by-case basis.
Credit Score Requirements
While we do not have a minimum credit score requirement, we generally like to see that at least one of the loan guarantors has a credit score of 620 or better.
Proof of Funds
We are happy to provide our clients and potential clients with a Proof of Funds Letter. If you require a proof of funds, please contact us.
Types of Deals We Fund
We fund residential, mixed-use, and commercial investment properties. We cannot however fund any owner-occupied residential properties.
Length of the Loan
All of our loans are 1-year loans with no prepayment penalty. If a project ends up running longer than expected and the investor needs an extension, we will consider granting 90-day extensions. Granting extensions is typically not an issue as long as there are understandable reasons for the project to be taking longer. We will charge an extra point or two for each extension in addition to continued monthly interest payments.