The term private money is typically associated with conservative non-traditional financing provided by a borrower’s family and friends. The term hard money is typically associated with high interest rate asset-based lenders. The term bridge money is typically associated with non-traditional temporary loans provided by banks. Zeus CrowdFunding is a unique alternative due to our very fast funding process, low interest rates and fees, our conservative risk-adverse standards, and participation by individual Z-Crowd investors in our program.
Yes and no. Our clients have an average score above 700. Credit scores and credit history are great tools for assessing the likelihood of repayment, but unlike a traditional bank, we consider the following additional factors that may offset less than perfect credit:
We consider these factors before making a final determination for any borrower, regardless of credit score and credit history. We do not finance solely against the property or solely against the borrower, and we take an overall common sense approach to both.
Most banks and hard/private money lenders are unable to finance these projects because of regulatory or guideline restrictions and insufficient processes. Zeus CrowdFunding is not a mortgage banking entity or a depository, so they are excluded from these requirements. In fact, banks and mortgage lenders are a key source of referrals to Zeus CrowdFunding.
We have a third party provider assess the value and condition of the property prior to funding. The value is typically underwritten a second time internally prior to pre-funding. This is one of our keys to maintaining more than adequate leverage.
Zeus CrowdFunding is provided as real estate financing collateralized against the quick-sale value of the property in question. These transactions are funded in the 1st-lien position, meaning that in the event of a default, the Z-Crowd members are the first creditors to receive remuneration. Zeus CrowdFunding is based on a percentage of the quick-sale value of the subject property. This is called the Loan-to-Value or LTV ratio and is typically between 60-70% of the value of the property. For the purposes of determining an LTV, the word “value” is defined as the value of the property after the necessary renovations to market the property at its highest and best use. This is often referred to as the After-Repair-Value or ARV.
Typically we fund between 60% and 75% of the ARV (After Repair Value) of the subject property for existing structures. The average for builders is 50%. With a higher ARV, you may pay higher points.
You need the greater of the two: $20K or 2x the cost of repairs + closing costs.
Yes, you can use property as an asset if it is owned free and clear and is located in an area we serve.
Closing costs will include 12 months of insurance on the subject property, the first monthly payment, and about $20k or 2x the cost of repairs.
This practice protects you from possible lapses. Also, most insurance companies will refund you a portion of what you paid or give it to you as a credit.
The benefit is to be able to use “other people’s money” while keeping your money as free working capital. Speak to your CPA about possible tax benefits of borrowing for repairs and renovations.
No. However, if you plan to keep the property, you will need to show 6 months of reserves for the PITI (Principle Interest Taxes and Insurance) for all investment properties as well as 6 months of HOA fees for all properties. If you have more than 4 properties financed, you will also need to have a credit score above 720.
Yes. The percent of ARV will be approximately 50%. Ideally the land should be worth twice as much as the structure.
No problem. There are no prepayment penalties. Additionally, you will only be charged interest on money you actually borrowed; so you would not be charged interest on any renovation money you have not drawn.
Typically, the cost of the required inspection is approximately $150. Although you may request draws as frequently as you wish, you may want to consider batching draw requests and submitting less frequently so as to incur fewer inspection charges.
Actually only a copy of your license and bank statements is required. However, the prefunded amount will likely be less and the cost to borrow higher. The more information you can provide, the easier it is to provide you with the very best deal.
Yes. If you need financing on your next purchase while waiting on the sale of your property, our Crowdfunding specialists can help you arrange the necessary bridge funding.
Yes. Of course it will depend on the deal itself, proper identification, and verifiable assets. ARV for foreign nationals will likely be about 50% to 60%.
Preparation and organization is the key to Fast Track funding. To get Fast Track funding, you need to have the following in place the day you request Fast Track:
1. An existing survey done within the past 7 years
2. Clear Title paperwork
3. All requested client docs uploaded by the day you ask for Fast Track funding.
4. An expedited appraisal request to your Borrower Specialist (requires an extra fee).
Be sure your Borrower Specialist knows up front that Fast Track is your goal.
There are 2 things you need to buy property an auction if you aren’t paying cash. First, the auction needs to allow for financing by Hard Money. Second, you need a Proof of Funds letter from Zeus CrowdFunding. Simply ask a Borrower Specialist at Zeus CrowdFunding for a Proof of Funds letter for the amount you’re willing to spend on the bid. It’s that easy!
If the money you need (Acquisition Price + Repair Costs + Fees) equals or is less than the money you qualify for (Funding Amount based on the percent of the property’s appraised after repair value) you essentially get 100% of your project financed!
Blended interest rates as low as 6.87% are possible on Buy & Hold combo projects (short term financing for the acquisition and repairs converting to long term financing). For the very best terms one would need :
• A credit score greater than 720
• 75% of the project costs or $100,000 in reserves after closing (whichever is greater)
• A maximum loan amount of $400,000
• Acquisition cost, repairs costs, and closing costs not exceeding 70% of the appraised value.