Investment home

$310,000 First Mortgage – New Rochelle Two-Family Investment Home

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$310,000 First Mortgage – Two-Family Investment in New Rochelle, NY

H&O Capital Funding was contacted by a local investor who needed some quick funds to payoff their current first mortgage. The home was in great shape, but the borrower had a rocky relationship with his current lender. Despite numerous obstacles posed by the current lender, H&O Capital was still able to get this done within 35 days. Had the current lender not held the deal up it could have been closed in under two weeks. Glad we were able to help with this two-family investment home.

For more information on loans that we offer, visit our website.…

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Commercial Real Estate Market

H&O Capital Funding 2017 Recap

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How Many Loans Did you Close?

2017 was a great year for H&O Capital Funding. H&O funded thirty-two loans this year, for a total dollar amount of just shy of $24 million. The loans ranged from as small as a $125,000 second mortgage up to a $4.25 million blanket loan on multiple residential investment properties.

What kinds of loans?

H&O saw a variety of loans this year. Everything from cash-out refinances to small second mortgages. There were also some creative loans to properties with multiple uses that required a few different liens to accomplish. The bulk of the year consisted of your typical first mortgages but there are always some unique deals and 2017 was no different. One theme ringing true in nearly all of the loans H&O funded this year was a need for speed. Borrowers with TOE closings, payoff expiration dates, etc. flocked to H&O Capital to get their deals done in time. In fact, H&O closed a small loan in Westchester County in just two days!

What kind of clients?

From seasoned developers to first time investors, H&O Capital saw the gamut of real estate players looking for loans in 2017. There were a number of borrowers …

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Blanket First Mortgage

$1,300,000 Blanket First Mortgage – Yonkers, NY & Hartford, CT

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$1,300,000 Blanket First Mortgage – Multi-Family Properties in Yonkers, NY & Hartford, CT

In this deal a repeat borrower with H&O Capital Funding was back for another loan on some new properties he recently acquired in Hartford, CT. The borrower purchased a note that was in default on 5 multi-family properties up in Hartford, CT. After going through the foreclosure process, taking possession of the properties and doing some minor renovation work, the borrower reached out to H&O for a cash out loan as he has some new deals in the pipeline. For additional collateral the borrower put up a 3-family home in Yonkers, NY that he owned free and clear. H&O was able to close the loan in under three weeks, freeing up cash for some new year deals the borrower was looking at.

For more information on loans that we offer, visit our website.…

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Who Funds Hard Money Lenders?

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Where do Hard Money Lenders get their Funding?

Hard Money Lender funds come from one of three sources. Personal funds, a portfolio of investors or a public fund with money raised from many different investors similar to a REIT.

The first, a lender who uses personal funds, is likely the rarest. There simply aren’t that many lenders out there with enough personal funds to meet the demand for their service.

The second, a lender who has a portfolio of investors for each deal, is fairly common. These lenders generally have a pool of investors they can bring each deal to. The investors will then decide whether or not to invest in the deal as presented by the lender. Some lenders who use this method can have trouble raising funds for certain deals and may make promises to a borrower that they can’t keep. However, most of these lenders have investors who trust their judgement and jump at the chance to invest in any loan the lender brings them.

The third, a lender who raises funds from many different investors to create a pool of money or “fund” that they then lend out of. These lenders are becoming more and more …

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Pros and Cons of a Hard Money Loans

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Hard Money Loans Requirements

Conventional Lenders and Hard Money Lenders actually have surprisingly similar loan requirements. Both types of lenders rely heavily on the loan to value ratio, however, one con for conventional lenders is that they also go through borrowers’ personal financials including credit scores. While this may be a pro for hard money lenders as they do not ask for financials and credit scores, this extra security for conventional lenders allows them to typically lend up to a higher loan to value ratio than a hard money lender.

Timing

If you are looking to close a deal quickly, look no further than a hard money lender. They specialize in speed and can generally get deals closed in 30 days or less whereas a conventional lender needs at least 60 days to be able to close. A pro for hard money lenders.

Flexibility

As one might imagine, conventional lenders are governed by much stricter federal and state laws, as well as their corporate governance. We all know the saying, “think outside the box,” but this is exactly what a conventional lender cannot do. They work within specific boxes with specific criteria and the loans they do must be able …

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Why are smaller mortgages more difficult to get than larger mortgages?

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Two big reasons lenders prefer larger mortgages are:

Dollar amount of Equity
For your typical lender, foreclosure is a worst case scenario and one where the lender could end up losing money if their borrower is overleveraged. That’s why the Loan to Value ratio is so important. In the event of a foreclosure, the lower the LTV ratio the more comfortable a lender is that they will be made whole. If a borrower has enough equity in the property they are much more likely to either refinance with another lender or sell the property to make the current lender whole. Makes sense, right? The problem with smaller loans is that even at low LTV ratio levels (40-60%) there just isn’t a lot of equity in terms of actual dollars to make a lender comfortable. Here’s an example:

Scenario 1: LTV Ratio is 50%, property is worth $500,000, total equity in the property is $250,000

Scenario 2: LTV Ratio is 50%, property is worth $50,000, total equity in the property is $25,000

In Scenario 1 a lender feels very comfortable with their loan amount. Even if they have to go through the entire foreclosure process and take the property in, there …

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$1,170,000 First Mortgage – Single Family Investment Property on Long Island

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$1,170,000 First Mortgage – Single Family Investment Property – Roslyn, NY

In this deal the borrowers were a couple from California who were looking for a loan on a single family investment property on Long Island. The borrowers had struck a good deal on the home but had committed to closing in 30 days. Their conventional lender couldn’t get it done in a timely fashion and so they turned to H&O Capital Funding to solve their problems. H&O was able to get them the funds they needed to close in plenty of time. Smooth sailing for another borrower in need.

For more information on loans that we offer, visit our website.…

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Private Loan Requirements

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Here is an outline of private loan requirements.

  • What Financials do you need to show to a private lender?
    99% of the time there are no personal financials required, however, property financials will sometimes be requested depending on the property type, tenancy and ownership.

Credit scores, personal tax returns, etc. are almost never requested.

  • Is there a loan to value ratio that needs to be met?
    Yes, though these can vary from lender to lender. Typically lenders will go up to about 70% LTV, but some go as high as 80% and others won’t go above 60%.
    The LTV requirement can also vary depending on the property type. Land, for example, will max out around 50% LTV, as it’s a riskier asset. Another factor that may influence the LTV requirement may be the market climate. In a hot market Lenders are more likely to go to higher LTV’s than they would be in a cold market.
  • Do I need to show the property produces income?
    Stabilized assets are always looked on more favorably by lenders as there is a cash flow to cover debt payments. But not all deals feature stabilized assets and Lenders understand this. Lenders do like to
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$3,150,000 Combined First and Second Mortgage – Industrial Property Loan – New Rochelle, NY

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$3,150,000 Combined First and Second Mortgage – Industrial Property Loan – New Rochelle, NY

The owners and operators of a commercial landscaping business on a 1.8 acre property in New Rochelle, NY came to H&O Capital Funding needing to refinance their current mortgage, which was being called as the landscapers had accrued a large tax lien. The stand alone value of the property wasn’t quite enough to get the landscapers what they needed, so H&O Capital had to get creative and added a second mortgage and a UCC against the landscaping business. The key was coming up with enough to pay off the current lender, pay the outstanding taxes, as well as create an interest reserve to help with monthly payments. While not their usual speedy closing, H&O Capital was still able to get the deal done in 45 days.

For more information on loans that we offer, visit our website.…

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$2,850,000 Single Family Investment Property – Brooklyn, NY

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$2,850,000 Refinance – Single Family Investment Property – Brooklyn, NY

A seasoned developer ran into some trouble with a construction loan for a large single-family home he was building in the Sheepshead Bay area of Brooklyn. Having started the project in 2009 just around the time of the financial collapse, the developer ran into some trouble. He was able to delay foreclosure proceedings by declaring bankruptcy, but time had finally run out and he needed to pay the lender off ASAP. H&O Capital Funding stepped in and gave him the funds he needed to get out of hot water. With the property occupied and cash flowing, the borrower now has some breathing room until he can refinance with a conventional lender down the road.

For more information on loans that we offer, visit our website.…

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Phone No:

914.620.6432

Email:

commercial@hom-realestate.com

Address:

133 Parkway Rd., Bronxville, NY 10708

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