95% Joint Venture Bridge Loan – Fix and Flip/Rental

Do you have a potential Fix and Flip, rental property or Buy/Hold real estate investment property which is rich with potential equity, however you lack the cash needed to pull it off? We may be able to help. For deals that meet standard criteria, we can fund up to 95% of the Purchase Price (PP) with joint venture bridge loan financing options for NOO (Non-Owner-Occupied) properties by paying the closing costs.

We only require you bring 5% of the PP as “skin-in-the-game” money. The good news is that, at close of escrow, we credit back the entire 5% to the Real Estate Investor Professional for use with the rehab work on the newly acquired property. Any rehab costs above 5% are born by the REI Pro.

NOTE: The 95% Financing Program is like hard money, but with one important distinction: Our lending does not offer loans. Instead, we offer a Joint Venture (JV), a form of equity that includes a 50/50 profit
split. The REI Pro brings a deal that meets our funding criteria, and we bring the funds to make it
happen.
Our ARV “sweet spot” are properties ranging from $200,000-$800,000. We are open to smaller and
larger ARV deals, if they are really the right fit.

Term: Six Months or less
Security: 1st Position note

I. Features & Benefits for Fix and Flip & Rental buy/hold

A. We limit funding to experienced REI Pros.
B. We cover 95% of the Purchase Price of the investment property and pay the closing costs; while the REI Pro ( you ) brings in the other 5% of the Purchase Price.
C. We do not charge any upfront or origination fees to the REI Pro.

D. The 95% Financing Program is available nationwide.
E. We only funds deals where the property purchase includes a generous amount of equity, i.e.
approximately 40% in total, comprised of the following potential components:

1. 10%-20% discount or more off the current Fair Market Value (FMV) from the seller, because they are
   in financial distress of some sort and need to move out of the property ASAP. For example, it may be
   the result of a cash-for-keys/deed-in-lieu transaction between the REI Pro and the current property
   owner.
2. Value added to the property as the result of cosmetic-only rehab work, undertaken by the REI Pro
   after the close of escrow, for say a 15%-20% increase in the After Repair Value (ARV).
3. The REI Pro brings in an equity investor for say 5%-10% of the purchase price.
4. The REI Pro secures equity-based (NOT a loan), seller carry back financing from the current property
   owner for say 5%-10% of the purchase price.
5. A combination of 1., 2, 3. & 4.
   F. Once escrow has closed, the REI Pro owns the property, the JV agreement ends, and we the lender leaves with a first position promissory note (6-month term, 14% simple annual interest), that includes our 50% share of the net profit + the amount that we originally provided, less any expenses.

II. Case Study Joint Venture Bridge Loan

A. What follows are details of a cosmetic-only rehab project undertaken by an experienced REI Pro.
Time frames from beginning to end of the average for this type of no-permit project usually takes a few
months. The REI Pro had an investment opportunity that he had penciled out as viable; it was ready to
go.
B. Situation: The REI Pro had the property under contract, with a lot of potential equity, however his
normal funding source recently went out of business.
C. Problem: The REI Pro needed first position funding, and soon
D. Solution: We provided the needed funding, on a joint venture (JV) basis, with the REI Pro. We
provided 95% of the Purchase Price (PP) as well as the closing costs, in the form of an equity/Joint
Venture deal, in trade for a share of the net profits (gross profit less all expenses). The REI Pro covered the other 5% of the purchase price for the NOO (Non-Owner-Occupied) property to be acquired because we require REI Pros to have some “skin-in-the-game” money invested in the deal, i.e. 5% of the purchase price. At close of escrow, we credited back the entire 5% to the REI Pro for use with the rehab work on his
newly acquired property. Put another way, we put up about 101% of the purchase price (95% + 5% +
1% closing costs), once the dust settled.
The REI Pro was able to pay for all the rehab costs with the 5% credited back because they limited their
rehab work to what was is known in the industry as a “lipstick rehab”—essentially paint and minor
repairs.
E. At closing, we monetized its equity position in the deal by accepting a six-month, first position note
from the REI Pro with a face value of $800,000. The details of the deal are as follows:

1. After Repair Value (ARV): $800,000
   (confirmed by a recent appraisal & this was the eventual selling price after rehab)
2. Fair Market Value (FMV) of the property to be acquired: $650,000
   (confirmed by the same recent appraisal; it was purchased from a financially distressed seller)
3. Purchase Price: -$500,000
   ($475,000/95%/CTF + $25,000/5%/REI Pro) ———–
4. Gross profit ($800,000/ARV-$500,000/PP) $300,000
5. Total expenses: $150,000
   (Closing fees, rehab, interest and other financial costs mutually agreed to by both parties)
6. Purchase price $500,000
7. Total costs $650,000
   ($150,000/expenses + $500,000/PP)
8. Gross profit $150,000
   ($800,000-$650,000) ———–
   $800,000
9. Net profit to REI Pro, $75,000
   (50% x $150,000 =his/her equity in the property)
10. Net profit to us (the lender) , $75,000
    (50% x $150,000 =
    1st Position note) ———-
    $150,000
    

Result: By getting a re-credit of his/her initial $25,000 capital outlay, the REI Pro enjoys a 300% return on this project ($25,000/outlay vs. $75,000/profit).

If you would like us to send you a Deal Work Up Form, Instructions, etc. please EMAIL the following information to: support@asbclf.com

1. Name
2. Phone number
3. Email address
4. State you want a 95% Financing Info Pack.

Alternatively request via our contact form.