Line of Credit Program for California Commercial or Residential Investment Properties
Revolving line, no prepayment penalty
Pay interest only on fund drawn, not entire credit line amount
Fixed rate & Interest-Only payment
3 year balloon, option to renew with good payment history
Minimum draw per instance: $5,000
Maximum 2 draws allowed per month ($100 fee charged per draw)
Typically funds within 1-4 weeks
LTV/CLTV: up to 50%
Line Amounts: $100,000 - $1 million
Origination Fee: 4 points
Rates:
1st mortgages: 11 - 12%
2nd mortgages: 12 - 12.5%
With a typical private money refinance, you cash out your equity and immediately begin paying interest on the entire loan amount. With this line of credit program, the lender funds the loan and allows you to make a draw whenever needed (no more than twice a month) and you would only pay interest on the drawn amount, not the entire loan amount. You can pay back the drawn amount at any time during the loan term with no prepayment penalty.
You must have a lot of equity in your property in order to qualify for this real estate line of credit loan program. The lender will do a 2nd mortgage on the property but the 2nd loan amount must be no less than one third of the 1st mortgage balance at the time of funding. Also, the combined loan amount (new 2nd and existing 1st) must be less than 50% LTV (loan-to-value).
The lender has a third party service that handles the draws for borrowers and they charge a fee of $100 per draw. It takes a few days to process and the funds are transferred to the borrower’s bank account. Only 2 draws are allowed each month. The lender’s origination fee is 4 points so borrowers should consider this when determining their requested loan amount.
- 2nd liens are not available if the 1st is larger than $1,500,000
- For 2nd lien positions, any prepayment penalty, yield maintenance, or defeasance amount for the 1st is included in the CLTV calculation
- For 2nd lien positions, 1st note cannot contain an acceleration clause
- 2nd position lien line amount must be within an acceptable ratio compared to the 1st lien amount (3:1 minimum)
SFR/2-4 units
Retail
Office
Multifamily (5+ units)
Mixed-use
Warehouse / Industrial
Commercial condo/strip center
Churches / Places of worship
School / Daycare
Hotel / Motel / B&B
Restaurants / Specialty
Carehome / Assisted Living Facility
See other CA Private Money Loan Programs
Company: Stonecrest (DRE #01857851)
Disclaimer: all information herein is believed to be correct, but we do not guarantee its accuracy and rely on prospects to rely only on their own investigations.
John owns a rental home in San Jose with an appraised value of $1,000,000. He has an existing mortgage with a balance of $300,000. John owns a business and has had a hard time collecting receivables in the past 2 years. He can cash out $150,000 of equity from his rental home but he only needs $10,000 to get him through the next 2 months and he doesn’t want to have pay interest on $150,000. John’s local bank declined his request for an equity loan so he does a search on Google for a private money loan and finds this web page. He contacts the lender and gets approved for a $150,000 2nd mortgage against his property. John provides all the required paperwork and title documents to the lender and the loan funds within 2 weeks. John draws the $10,000 needed for his business and begins paying interest on that $10,000. He may need to draw $15,000 next month and he now has some piece of mind knowing the funds are available whenever needed.