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88.1%

Loan to Value

$498,500

Total Loan

real_estate_financing_express_capital_financing_simon

Ben
Shrara

From Low Appraisal to High Reward in a Profitable Flip

Case Study I Fix & Flip

When a surprisingly low property appraisal threatened to derail a major investment, clever financing solutions such as expanding the loan-to-value thresholds and slashing the interest rate successfully rescued the deal.

88.1%

Loan to Value

$498,500

Total Loan

Express Capital Financing Loan Officer Ben Shara

Ben
Shrara

The Stats

$498,500

Total Loan Amount

12%

Interest Rate

88.1%

Loan To Value

91.5%

Loan To Cost

71.7%

ARLTV

The Stats

$498,500

Total Loan
Amount

12%

Interest
Rate

88.1%

Loan To
Value

91.5%

Loan To
Cost

71.7%

ARLTV

Express Capital Financing Loan Officer Ben Shara

Loan Officer

Ben Shrara

Overview

Loan Program Used

Fix & Flip

Closing Date

November 5th, 2024

Location

Bethel, CT

Property Type

Single Family

Goals

Leverage our relationship and the client's proven experience to overcome the challenge of a lower-than-expected property appraisal.

3 min read

Project Summary

Faced with a low property appraisal that threatened the financial viability of a significant investment, Ben Shrara and the team at Express Capital Financing crafted an innovative solution: they increased the ARLTV ratio beyond typical limits and reduced the interest rate to zero.

This strategic decision not only salvaged the project by providing the necessary capital but also reinforced the importance of adaptability and strong client relationships in the face of unexpected financial challenges. The outcome demonstrated the transformative impact of custom-tailored financing solutions in ensuring the success of complex real estate deals.

FixNFlip

The Challenge

The project initially seemed like a routine investment for our seasoned client, necessitating a loan that covered 90% of the property's purchase price and 100% of the renovation costs. However, complexities surfaced when the property in question was appraised at a lower value than anticipated, threatening to considerably reduce the loan amount available under typical lending conditions.

Low Property Appraisal: Lower-than-expected property appraisal reducing available financing.
Financial Leverage: Need for 90% purchase financing and 100% renovation costs unmet due to appraisal.
Risk of Derailment: Financial constraints threatening project timeline and viability.

The Solution

Understanding the nuances of the deal and the importance of client relationships, Ben Shrara and the team at Express Capital Financing saw a way through the impasse. Leveraging their deep industry experience and trust in the client’s track record, they proposed an unprecedented solution: adjusting the After Repair Loan to Value (ARLTV) ratio to exceed the usual 70% limitation, and importantly, reducing the interest rate to zero.

This innovative, custom-tailored solution was crafted specifically to counteract the impact of the low appraisal, effectively increasing the borrowing limit and alleviating the financial strain caused by higher upfront costs.

Adjusted ARLTV Ratio: Exceeded typical limits to increase borrowing potential.

● Zero Interest Rate: Implemented unprecedented interest reduction to ease financial burden.

● Quick and Flexible Response: Quick adapted the deal to provide a fitting solution to the client’s unique challenges.

● Preserving Financial Strategy: Secured the required capital for timely project execution but also protected the client's overall investment strategy.

Total Loan Amount: $498,500
Interest Rate: 12%
Loan To Value (LTV): 88.1%.
Loan To Cost (LTC): 91.5%
ARLTV %: 71.7%

Express Capital Financing Loan Officer Ben Shara

Need funding for your next Fix & Flip?

Express Capital Financing Loan Officer Ben Shara

Key Takeaways

Through strategic foresight, a custom-tailored loan solution, and a foundational relationship built on trust and proven success, Ben Shrara, and Express Capital Financing transformed a potential setback into a resounding success.

  • Strategic Flexibility: The ability to adjust loan terms in real time to accommodate unexpected hurdles is a game-changer for investors. Express Capital Financing showcased their commitment to their client’s success by modifying the ARLTV and reducing the interest rate.
  • Trust and Relationship: The decision to extend beyond typical lending parameters highlights the importance of established relationships and trust between a lender and investor.
  • Quick and Thoughtful Decision-Making: The swift actions taken by Ben Shrara and the team prevented delays that could have jeopardized the entire project.
  • Innovative Solutions for Experienced Investors: Seasoned investors, when paired with equally experienced lenders, can navigate complex deals and offer more advantageous loan terms.
“Demand more from your lender—Choose not to settle with a lender who can't offer the leverage you require to maximize your capital's potential. It's not just about funding, it's about partnering with someone who executes flawlessly and champions your success.”
Ben Shrara

Flip with Confidence and Customized Financing

When your fix and flip project faces unforeseen financial roadblocks — perhaps a surprisingly low property appraisal — it can throw off your timeline or threaten the viability of your investment. This is when the expertise and support of Express Capital Financing becomes invaluable. With the guidance of our experienced loan officers like Ben Shrara, we can customize fix and flip loans to overcome your project’s challenges.

Contact us today to secure a loan that recognizes the potential of your project and sets you on the path to success.

Featured Topics

Overview

Loan Program Used

Fix & Flip

Closing Date

November 5th, 2024

Location

Bethel, CT

Property Type

Single Family

Goals

Leverage our relationship and the client's proven experience to overcome the challenge of a lower-than-expected property appraisal.

Express Capital Financing Loan Officer Ben Shara

Loan Officer

Ben Shrara

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