This is a sample of how to properly submit your loan request to a HM lender and get your loan funded. This shows your lender that you have done your homework and throughly understand your real estate deal.
EXECUTIVE SUMMARY PROJECT DESCRIPTION—R&H Holdings will acquire Lot 15 Blk B Brookhollow Sec 1 known as . The purchase price is $85,000 with the closing scheduled for 02/25/2010. After acquisition, R&H Holdings will rehab the above mentioned single family home and then market it for resale. The home will be a 3 bedroom, 2 bathroom fully remodeled configuration at 1525 square feet. The finish out will meet or exceed market for that area, featuring quality materials such as granite counter tops, hardwood floors and will be the only home in the neighborhood with an inground pool. The fact that we will list the property at the same price point as average homes in the area, gives us a viably short turn around time and allows us to move on to the next project. PROJECT LOCATION— is located in Pflugerville, TX, just two miles from HWY 1825 in zip code 78660. This provides quick and easy access to downtown Pflugerville. The home is located in the center of the Pflugerville ISD, which includes Park Crest Junior High School and Pflugerville High School. It’s also just minutes away from the downtown Pflugerville shopping and dining area. This area of Pflugerville continues to be a laid back staple of everyday life with families, homes and businesses that have been a part of the community for decades. PROJECT FINANCIAL SUMMARY—The overall development strategy is to acquire the property and begin remodeling immediately. The closing date for the property is on or before February 25th, 2010. The project capital structure for a phased rehab plan with incremental draws is based on securing a 12 month, interest only hard money loan in the amount of $110,000.00. R&H Holdings will have $20,000.00 to contribute to the overall project costs of $130,000.00 and will be the sole guarantor of the hard money loan, with total repayment to be finalized on or before February 25th, 2011.
1|Page
AFTER REPAIRED VALUE: $150,000.00 PROJECT COSTS: $130,000.00 TOTAL $85,000.00 PURCHASE PRICE $25,000.00 REHAB COSTS $8,500.00 CLOSING COSTS $5,200.00 4 MONTHS LOAN PAYMENTS $6,300.00 CONTINGENCY/INSURANCE PROJECTED PROFIT: $20,000.00 For the $110,000.00 investment, a 13% annual interest only return is being offered with 4 months of payments to be figured in up front. As mentioned in the Project Financial Summary, R&H Holdings does have $20,000.00 to invest in the project; however, we will consider offering an equity position - subordinate lien position to majority lender - in the project for 13% (or $2,600.00). The 13% equity position will be fully paid upon successful execution of ‘exit strategy’ employed; not to exceed 12 months. PROJECT EXIT STRATEGIES: STRATEGY 1: o Rehab, market and sell o If goal is not achieved within 6 months, execute ‘Strategy 2’ STRATEGY 2: o Refinance property through conventional means and pay off hard money loan o Give additional 2 months to sell property Make any necessary price adjustments to move property o If goal is not achieved within 60 days, execute ‘Strategy 3’ STRATEGY 3: o Market for rental and add to ‘Buy and Hold’ portfolio. All net positive cash flow will be directed to 13% equity partner while all operational diligence will be applied to manage and maintain the subject property’s value by guarantor.
2|Page
COMPARATIVE MARKET ANALYSIS—There is sufficient data to support the projected ARV as well as a strong LTV analysis. The floor plan for is in the mid range for the area, which is in strong demand. : SOLD COMPS ADDRESS
SqFt 1828 1780 1765
Sold Price $162,950.00 $147,000.00 $155,000.00
Sold Date 1/11/2010 10/23/2009 08/18/2009
The average of the recent sales is $154,983.33. There have been adjustments made for square footage, and it must be taken into consideration that is the only home in the immediate area with an in-ground swimming pool. The decision to list the remodeled home at $150,000 is not only within comparable values, but due the quality of the finished product, will make it the most desirable home in the area, prompting multiple offers. ABOUT R&H HOLDINGS—R&H Holdings was officially formed in September 2009. A Texas general partnership, it is lead by Harvey and Rosa Ryan. Both leaders have extensive corporate America backgrounds, with Harvey Ryan having 5+ years of extensive experience in the acquisition, remodel and sale of single family homes. R&H Holdings has a close working relationship with H.I.S.R., Inc. and IFCOM, ran by Bobby R. Howard and will be working closely with him on all future projects. The geographic focus of the company is strictly in Central Texas, with the greater Austin area the immediate priority. Full resumes and references available upon request.
3|Page
Short Term Investment Summary for Property Parkview Property Basics Address City/State/Zip Bedrooms/Baths
3/2.0
Square Feet
1525
List Price
$85,000.00
Market Value
$158,096.00
Cost Per Square Foot
$55.74 Before
Mortgage Info Loan-to-Value Ratio
First
Second
Short Term Performance
70.00%
--
Acquisition Expenses
$110,000.00
--
Repair Expenses
$1,239.33
--
Holding Expenses
$3,000.00
Hard Money
--
Hedge Expenses
$2,500.00
1
--
Sales Expenses
$6,000.00
Interest Rate
13.00%
--
Total Expenses
$42,595.00
Monthly PMI
$0.00
--
Loan Amount Monthly Payment Loan Type Term
Market Value Expenses Total Loan Payments
$6,000.00 $25,095.00
$158,096.00 $42,595.00 $4,957.32
Prepayment Penalties
$0.00
Balloon Payment
$0.00
Mortgage Points
$0.00
Expected Profit Assignment Fee Max Offer
$20,000.00 $0.00 $90,543.68
Short Term Acquisition Expenses for Parkview Appraisal Title Exam Title Insurance Document Prep Recording Fees Down Payment Loan Origination Fees Closing Costs Attorney Fees Pre-Title Search Termite Report Survey Transfer Fees Prepaid Escrow Inspection House Insurance Other Percentage Method Total Expenses (using Percentage Method)
$6,000.00 $6,000.00
Short Term Repair Expenses for Parkview Floors - Carpet
$1,660.00
Floors - Vinyl or Tile
$1,230.00
Floors - Hardwood Floor
$1,100.00
Walls - Interior Patch, Paint, and Trim
$2,575.00
Walls - Trim and/or Window Area Walls-Wallpaper Kitchen-Sink and Base
$450.00
Kitchen-Counter
$1,025.00
Kitchen-Cabinets
$2,000.00
Bathroom #1- Sink and Base
$550.00
Bathroom #1-Vanity/Cabinet/Mirror
$400.00
Bathroom #1- Tub
$275.00
Bathroom #1-Toilet Bathroom #1-Shower
$270.00
Bathroom #1-Accessories
$175.00
Plumbing-Kitchen
$150.00
Plumbing-Bathroom #1
$225.00
Plumbing-Bathroom #2
$325.00
Plumbing-Bathroom #3 Plumbing-Hot Water Heater Plumbing-Miscellaneous
$610.00
Plumbing-Washer/Dryer/Hookup Plumbing-Washer Sink Tub Heat-Furnace Heat-Ducts Heat-Thermostat Appliances-Stove
$475.00
Appliances-Dishwasher
$300.00
Appliances-Refrigerator
$1,050.00
Appliances-Disposal
$175.00
Electrical-Fuse Box Electrical-Circuit Breaker Electrical-Wiring Foundation-Floor Joist
$1,500.00
Short Term Repair Expenses (continued) Foundation-Drainage Attic-Water Damage Attic-Ventilation Attic-Insulation Fireplace-Gas Fireplace-Wood
$50.00
Alarm System Exterior
$2,525.00
Roof-Shingles
$650.00
Roof-Sheeting Chimney Exterior-Siding
$1,550.00
Exterior-Water Damage Door-Screen Door-Main
$200.00
Door-Patio
$600.00
Window-Replacement Gutters and DownSpouts Landscaping
$550.00
Carpentry
$1,500.00
Garage
$375.00
Driveway Porch Deck
$475.00
Miscellaneous Window-Glass Window-Treatments Smoke Detectors Mailbox
$50.00
Door-Knocker Electrical-Bulbs Exterior-Termite Damage Other
$50.00
Short Term Repair Expenses (continued) Percentage Method Total Expenses
$25,095.00
Short Term Holding Expenses for Parkview Electric/Hydro Water Taxes and Insurance Grass Cutting Snow Removal Inspection Cleaning Other Percentage Method Total Expenses (using Percentage Method)
$3,000.00 $3,000.00
Short Term Hedge Expenses for Parkview Hedge Expenses
$2,500.00
Other Percentage Method Total Expenses
$2,500.00
Main File No. 010525 Page #13
Subject Photo Page Borrower/Client Property Address City Pflugerville Lender
Dr
County Travis
State Tx
Zip Code 78660-2361
Subject Front Dr
Sales Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age
N/A 1,525 7 3 2 Average Typical +/- 0.24 Acres Average 27 - Updated
Subject Rear
Subject Street
Main File No. 010525 Page #14
Subject Photos Borrower/Client Property Address City Pflugerville Lender
Dr
County Travis
State Tx
Pool
Exterior
Interior
Interior
Interior
Interior
Zip Code 78660-2361
Main File No. 010525 Page #15
Subject Photos Borrower/Client Property Address City Pflugerville Lender
Dr
County Travis
Interior
Interior
State Tx
Interior
Zip Code 78660-2361
Main File No. 010525 Page #12
Location Map Borrower/Client Property Address City Pflugerville Lender
Dr
County Travis
State Tx
Zip Code 78660-2361
Main File No. 010525 Page #3
Uniform Residential Appraisal Report
File # 010525 comparable properties currently offered for sale in the subject neighborhood ranging in price from $ 90,000 to $ 180,000 . 9 comparable sales in the subject neighborhood within the past twelve months ranging in sale price from $ 85,000 to $ 190,000 . 19 FEATURE SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COMPARABLE SALE # 3 Address Dr 603 Green Field Cv 1000 Creekbend Dr 801 Brookhollow Dr 2361 Pflugerville Pflugerville Pflugerville Proximity to Subject 0.30 miles W 0.38 miles NW 0.33 miles NW Sale Price $ $ $ $ N/A 162,950 147,000 155,000 Sale Price/Gross Liv. Area $ sq.ft. $ $ $ 89.14 sq.ft. 82.58 sq.ft. 87.82 sq.ft. Data Source(s) MLS # 7289794 MLS # 6745628 MLS # 6809678 Verification Source(s) CAD CAD CAD VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment Sales or Financing Cash Conventional FHA Concessions None None None Date of Sale/Time 1/11/2010 10/23/2009 8/18/2009 Location Average Average Average Average Leasehold/Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Site +/- 0.24 Acres +/- 0.25 Acres +/- 0.23 Acres +/- 0.25 Acres View Typical Greenbelt -5,000 Average Average Design (Style) Traditional Traditional Traditional Traditional Quality of Construction Average Average Average Average Actual Age 27 - Updated 14 27 - Updated 25 - Updated Condition Good Good Good Good Above Grade Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Room Count 7 3 2 7 3 2 7 4 2 7 3 2 Gross Living Area 1,525 sq.ft. 1,828 sq.ft. -12,120 1,780 sq.ft. -10,200 1,765 sq.ft. -9,600 Basement & Finished None None None None Rooms Below Grade N/A N/A N/A N/A Functional Utility Average Average Average Average Heating/Cooling Central Central Central Central Energy Efficient Items Typical Typical Typical Typical Garage/Carport 2 Car Garage 2 Car Garage 2 Car Garage 2 Car Garage Porch/Patio/Deck CvPorch / Patio Similar Similar Similar Additional Features Inground Pool None +10,000 None +10,000 None +10,000 Days on Market 25 186 52 4
SALES COMPARISON APPROACH
There are There are
Net Adjustment (Total) + - $ + - $ -7,120 Adjusted Sale Price Net Adj. Net Adj. 4.4 % 0.1 % of Comparables Gross Adj. 16.6 % $ 155,830 Gross Adj. 13.7 % $ I did did not research the sale or transfer history of the subject property and comparable sales. If not, explain
+ - $ Net Adj. 0.3 % 146,800 Gross Adj. 12.6 % $ -200
400 155,400
My research did did not reveal any prior sales or transfers of the subject property for the three years prior to the effective date of this appraisal. Data Source(s) CAD & MLS My research did did not reveal any prior sales or transfers of the comparable sales for the year prior to the date of sale of the comparable sale. Data Source(s) CAD & MLS Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3). ITEM SUBJECT COMPARABLE SALE #1 COMPARABLE SALE #2 COMPARABLE SALE #3 Date of Prior Sale/Transfer 10/6/2009 None None None Price of Prior Sale/Transfer Foreclosure Data Source(s) CAD & MLS CAD & MLS CAD & MLS CAD & MLS Effective Date of Data Source(s) Appraisal Date Appraisal Date Appraisal Date Appraisal Date Analysis of prior sale or transfer history of the subject property and comparable sales The Subject property has a foreclosure on 10/6/2009.
Summary of Sales Comparison Approach Subject and all three comparables are located in the same market area and are considered to appeal to the same potential buyers. Comparables have been adjusted for site locations, gross living area, and exterior features. No other adjustments are deemed necessary and none are made.
RECONCILIATION
***The attached appraisal report is subject to completion of rehab. See attached budget / rehab list.***
Indicated Value by Sales Comparison Approach $ 150,000 Indicated Value by: Sales Comparison Approach $ 150,000 Cost Approach (if developed) $ 158,593 Income Approach (if developed) $ The Sales Comparison Approach is considered to give the most accurate indication of the current market value. Primary reliance placed on the Sales Comparison Approach. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, or subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair: Date of Photographs/Inspection: February 05, 2010. Date of Appraisal: February 05, 2010.
Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser’s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ , as of , which is the date of inspection and the effective date of this appraisal. 150,000 February 05, 2010
Freddie Mac Form 70 March 2005
Page 2 of 6
Fannie Mae Form 1004 March 2005
Main File No. 010525 Page #2
SUBJECT
Uniform Residential Appraisal Report
File # 010525 The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property. Property Address City Pflugerville State Tx Zip Code 78660-2361 Dr Borrower Owner of Public Record County Travis Legal Description Lot 15 Blk B Brookhollow Sec 1 Assessor's Parcel # 02744007090000 Tax Year 2008 R.E. Taxes $ N/A Neighborhood Name Brookhollow Map Reference 12420 Census Tract 0018.36 Occupant Owner Tenant Vacant Special Assessments $ None PUD HOA $ per year per month Property Rights Appraised Fee Simple Leasehold Other (describe) Assignment Type Purchase Transaction Refinance Transaction Other (describe) Hard Money Appraisal Lender/Client Walter Capital Funding LLC Address 600 Round Rock West Drive #601, Round Rock, Tx 78681 Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? Yes No Report data source(s) used, offering price(s), and date(s). The subject is currently listed for sale at $92,500. DOM - 25. MLS .
CONTRACT
I did did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. Contract not available Contract Price $ N/A Date of Contract N/A Is the property seller the owner of public record? Yes No Data Source(s) Is there any financial assistance (loan charges, sale concessions, gift or downpayment assistance, etc.) to be paid by any party on behalf of the borrower? If Yes, report the total dollar amount and describe the items to be paid.
NEIGHBORHOOD
Note: Race and the racial composition of the neighborhood are not appraisal factors. Neighborhood Characteristics One-Unit Housing Trends
One-Unit Housing
SITE
No
Present Land Use %
PRICE AGE One-Unit 75 % $ (000) (yrs) 2-4 Unit 5% Low Multi-Family 50 0 5% 300+ High 60 Commercial 5% 175 Pred. 25 Other 10 % Neighborhood Description Marketability and appeal of properties in the neighborhood are average. Shopping and recreational facilities, access to employment, schools, fire and police protection, garbage removal, street maintenance, protection from detrimental conditions and utility availability are adequate and acceptable. Market Conditions (including support for the above conclusions) General appearance and overall appeal of properties are average. No abnormal financing conditions are known. Neighborhood is part of local MLS area PF. Location Urban Built-Up Over 75% Growth Rapid Neighborhood Boundaries
Property Values Increasing Stable Suburban Rural Shortage In Balance 25-75% Under 25% Demand/Supply Marketing Time Under 3 mths 3-6 mths Stable Slow Boundaries: City of Pflugerville, Texas and surrounding areas.
Declining Over Supply Over 6 mths
Dimensions Plat not available Area +/- 0.24 Acres Shape Rectangular Specific Zoning Classification A1 Zoning Description Single Family Residential Zoning Compliance Legal Legal Nonconforming (Grandfathered Use) No Zoning Illegal (describe) Is the highest and best use of subject property as improved (or as proposed per plans and specifications) the present use? Yes
View Typical
No If No, describe
Utilities Public Other (describe) Public Other (describe) Off-site Improvements - Type Public Private Street Asphalt Electricity Water Alley Gas Sanitary Sewer FEMA Special Flood Hazard Area Yes No FEMA Flood Zone X FEMA Map # 48453C0280H FEMA Map Date 9/26/2008 Are the utilities and off-site improvements typical for the market area? Yes No If No, describe Are there any adverse site conditions or external factors (easements, encroachments, environmental conditions, land uses, etc.)? Yes No If Yes, describe A survey was not provided and therefore no apparent adverse easements, encroachments, special assessments, slide areas, illegal or legal nonconforming use, are known. The highest and best use of the site and improvements is considered to be single family residential.
General Description
IMPROVEMENTS
Yes
Foundation
Exterior Description
materials/condition Interior
materials/condition
Floors Foundation Walls Concrete Slab Crawl Space Units One One with Accessory Unit Wood/Good WdLm/Tile/Cpt/New Walls Full Basement Partial Basement Exterior Walls # of Stories 1 Brick/Siding/Good Sheetrock/Good Trim/Finish Wood/Good sq.ft. Roof Surface Type Det. Att. S-Det./End Unit Basement Area Composition/Good Bath Floor % Gutters & Downspouts Typical Existing Proposed Under Const. Basement Finish Tile/New Bath Wainscot Fiberglass/Exclnt Window Type Outside Entry/Exit Sump Pump Design (Style) Traditional Metal/Good Evidence of Infestation None Ntd Storm Sash/Insulated Typical Year Built Car Storage None 1983 Screens Dampness N Settlement Effective Age (Yrs) 12 Driveway # of Cars Typical 2 Heating FWA Attic None Driveway Surface Woodstove(s) # HWBB Radiant Amenities Concrete Drop Stair Stairs Garage # of Cars Fence Wd Pvcy Other Fireplace(s) # 1 Fuel Gas / Elec 2 Floor Scuttle Carport # of Cars Porch Patio/Deck Patio Cooling Central Air Conditioning Finished Heated Att. Det. Built-in Other Pool Inground Individual Other Appliances Refrigerator Range/Oven Dishwasher Disposal Microwave Washer/Dryer Other (describe) Finished area above grade contains: 7 Rooms 3 Bedrooms 2 Bath(s) 1,525 Square Feet of Gross Living Area Above Grade Additional features (special energy efficient items, etc.). Subject to completion appraisal. See updates / budget list. Describe the condition of the property (including needed repairs, deterioration, renovations, remodeling, etc.). The functional utility of the subject floorplan is considered to be typical for the area. No items of physical, curable functional or external depreciation noted.
Are there any physical deficiencies or adverse conditions that affect the livability, soundness, or structural integrity of the property?
Does the property generally conform to the neighborhood (functional utility, style, condition, use, construction, etc.)?
Freddie Mac Form 70 March 2005
Page 1 of 6
Yes
Yes
No If Yes, describe
No If No, describe
Fannie Mae Form 1004 March 2005
Previous Project located at 12508 Deer Falls Drive, Austin TX Before
After
Previous Project located at 8314 Cahill Drive, Austin TX Before
After
