120k Minimum For Lending - The Reasons

People frequently ask me what our minimum loan amount is for a hard money loan. I explain to them that there is not a minimum amount that we will lend but the minimum ARV (After Repair Value) has to be $120,000. Sometimes they then ask if they bundle two properties worth $60,000 each if it fits that criteria. The situation would not work for our lending type. The reason this is the case is because of the exit strategy. The exit strategy for properties selling under $120,000 in our market would be to refinance. These are areas that are less likely to have a high amount of owner occupied properties. Because these are mainly rentals, eliminating the back end exit of sale for a lender is a scary position. Lenders are in the business of lending and not owning homes. We never want to take a home back and if it were to happen, we want to sell it quickly. We reduce the chances of a fast resell when we are in locations that do not sell often to people intending on making the property their primary residence.

Ian Walsh

215.839.3271

[email protected]