How it works
Increase your returns
- With the same funds it takes to flip one home, you can leverage your funds to work on more than one project at a time!
- Have you ever lost an opportunity because your money was tied up in a rehab? 1-2-3 lending can provide needed funds to hold a property until you are ready to start rehabbing.
- Have you ever lost an opportunity because a project was a little bigger than what you could fund? Supplement your funds with 1-2-3 lending.
Make a larger return on your money
Example: Home After Repair Value $200,000
A. Using Your Funds
$35,000 profit on $165,000 of your funds equals 21% return in 6 months (42% annual return)
Purchase & Closing costs
|
($100,000) |
Rehab cost |
($50,000) |
Holding costs 6 mos |
($3,000) |
Sell |
$200,000 |
6% realtor fee |
($12,000) |
Minus out-of-pocket |
($153,000) |
Profit |
$35,000 |
B. Using 1-2-3 lending
$23,300 profit on $46,700 of your funds equals 50% return in 6 months (100% annual return)
1-2-3 lending 65% ARV=$130,000: |
|
Rehab cost (your funds) |
(20,000) |
Holding costs (your funds) 6 mos |
(3,000) |
Loan costs (your funds): |
|
Sell |
$200,000 |
6% realtor fee |
($12,000) |
Minus out-of-pocket |
($34,700) |
1-2-3 lending payback |
($130,000) |
Profit |
$23,300 |
Loans are typically provided up to 65% of ARV (After Repair Value).
- If your property’s ARV is $150K, you may be eligible for a loan up to $97,500.
- If your property’s ARV is $200K, you may be eligible for a loan up to $130,000
- If you already own the property, you may be eligible for 100% construction loan.
- Construction loans are paid out on 'draws' based on work completed: photos, site visit.