Taking out a real estate investment loan might seem intimidating with several parties involved.
At Park Place Finance, we aim to make the process simple, with a team of dedicated professionals guiding you at every step.
Are you interested in taking out a real estate investment loan? Continue reading to learn about our streamlined process.Get started on your loan journey.
A successful real estate investment loan process involves various professionals working behind the scenes.
At Park Place Finance, our dedicated investment loan team comprises:
- Processors: collect and organize your paperwork, order your appraisal, and run credit checks.
- Underwriters: determine the risk associated with your loan and collect necessary documentation.
- In-house servicers: stay in touch throughout your loan’s lifecycle.
- Account executives: maintains communication with you before, during, and after your loan process.
Knowing who’s involved in your loan can offer clarity and peace of mind as you embark on your real estate investment.
To help you understand, let’s imagine a real-world scenario with Sarah and Ben, who are embarking on their first fix and flip project.
Sarah and Ben have found an investment property priced at $200,000 and they estimate the rehab costs to be $50,000.
At first, they considered a traditional mortgage, but the requirements were too strict and it would take them 30-60 days to secure the money — not soon enough to secure their ideal investment property.
Instead, they chose to get a private money loan, which was approved within a week.
The following was their process for securing their real estate investment loan with Park Place Finance.
Their first interaction is with our processors who collect and organize loan application paperwork, order the property appraisal, and run credit checks.
The processors ensure that the loan application is well-documented and set up for a successful underwriting review.
The next step is the underwriters’ review.
They assess the risk involved in extending a loan to Sarah and Ben, which includes reviewing their credit histories, financial statements, and the property’s potential value.
In this case, Sarah and Ben have stable incomes and a good credit score of 720, making them attractive borrowers.
The underwriters approve their loan, given these factors and the potential for a significant profit on the flip.
Once the loan is approved and disbursed, Sarah and Ben will interact with our in-house servicing team.
This team stays in communication with them throughout the loan term, providing reminders about the loan’s maturity date and crucial loan servicing information.
For instance, they ensure Sarah and Ben know that their loan, designed to mature in 12 months, should ideally have the project 50% complete by the six-month mark.
Throughout the process, Sarah and Ben have the support of a dedicated Account Executive.
This professional is their primary point of contact, providing updates, answering questions, and helping them plan for their next project.
Once Sarah and Ben successfully sell their first fix and flip property, their Account Executive helps them leverage their newly gained equity for their next investment loan.
Appraisers play a very important role in the loan process.
Their main role is to assess the value of your property, which in turn impacts the amount you can secure as a loan.
- Property valuation: Appraisers assess property value, influencing loan amounts.
- Loan-to-value ratio (LTV): Appraised value determines the percentage of financing available.
- Risk assessment: Appraisers evaluate loan risk based on property value.
- Collateral determination: Appraisals establish the property’s collateral value for lenders.
- Loan approval: Appraisals are crucial for loan approval.
- Market conditions: Appraisers consider market trends in property valuation.
- Property condition assessment: Appraisers evaluate property condition for loan considerations.
- Refinancing or selling: Appraisals impact refinancing and sale negotiations.
- Professional expertise: Appraisers provide impartial expertise in property valuation.
Park Place Finance provides a variety of loan options to cater to diverse investment strategies:
- Bridge loans: If you’re looking to quickly acquire or refinance a property when conventional financing isn’t feasible, a bridge loan can be a great fit.
- Fix and Flip loans: Aimed at investors like Sarah and Ben, who renovate properties for a quick profit. These loans fund 100% of renovation costs and close rapidly. On average, fix and flip investments earn a gross profit of $67,900.
- DSCR loans: These loans are designed for investors interested in long-term rental properties, providing financing based on the property’s expected cash flow.
- Ground Up Construction loans: Ideal for investors looking to build single-family projects from scratch.
At Park Place Finance, we believe in making the lending process as clear and straightforward as possible.
Every step of the way, you’ll have a team of experienced professionals working to make your investment dreams come true.
So whether you’re a seasoned investor or just starting your first project, remember, you’re not in it alone—we’re here to guide you.