We offer residential fix and flip loans, residential new construction loans, and transactional funding for any type deal.
Will I need to bring cash to close?
In general you will always need to bring roughly 10% of the loan amount to closing in cash. We will also verify that you have the cash reserves to make the anticipated monthly payments. You will also need to bring additional cash to close if you are not purchasing at 65% of the ARV that we conservatively estimate.
Does Real Alternative Capital fund rehab costs?
Yes, we are willing to fund the rehab costs depending on the deal. We typically lend up to 65% of the ARV, if you have a good enough deal we are certainly able to fund some or all of those construction costs.
Why should I work with Real Alternative Capital?
Do I need to have a property under contract to get a pre-approval?
No you do not need to have the property under contract. You can go through the application process before you find the right deal for peace of mind that you can get the funding you need. Pre-approval takes 24-48 hours.
Do we accept second lien positions?
We only take second lien positions where we are already in the first lien position.
How fast can you close?
After receiving all necessary documents such as: an appraisal and inspection report, we can close as fast as 10 days. In some cases we can close without an appraisal. Transactional funding can be approved sooner if we have all the necessary paperwork.
What is the minimum loan amount? Maximum Amount?
Our minimum loan amount is $50,000 and our maximum loan amount is $2,000,000.
What kind of experience or track record does Real Alternative require?
Although we prefer experienced borrowers, we ALL have to start somewhere. So we will consider any deals on a case-by-case basis. Please note if you are a less experienced borrower, the underwriting process and loan process may take longer and we may ask for more paperwork.
What percentage of the deal will Real Alternative fund?
We will fund up to 90% of the purchase price and 100% of the rehab cost but maximum ARV is 65%. On new construction 90% of the purchase price (land) and 100% of the rehab cost but maximum ARV is 70%.
Do I need an appraisal for you to lend?
We only do appraisals when we are unable to do our own valuations. We primarily value our properties instead of hiring an appraiser, this saves us valuable time and money.
Am I responsible for the appraisal (if needed)?
You can order the appraisal but it is imperative that you have the appraiser contact Real Alternative so they know what type of appraisal is needed. We are also happy to order the appraisal for the property, but ultimately you will be responsible for the cost of appraisal.
How is my loan amount determined?
Will I need insurance on the property?
Yes. It is imperative that you have the appropriate coverage (equal to or greater than the loan amount) for the property and that Real Alternative Capital is listed as the additionally insured. In the case of properties in flood zones, the proper insurance will be required depending on FEMA flood class.
Will Real Alternative Capital lend on owner occupied houses?
No, we cannot lend on ANY owner occupied home or lend to an individual (don't worry, setting up an LLC to receive the funds on is a very SIMPLE process).
Do I need a business entity in order for Real Alternative to lend to me?
Yes, we can ONLY lend to business entities (LLC's, LLP's, Corporation's). You will be required to set up an entity if you do not have one prior to closing; if you need assistance Dave and his team have set up countless LLC's, it's easy, cheap, and fast to set up an LLC in most states.
All deals must be closed through a closing/title company. All borrowers must have legal representation. All borrowers must have Title Insurance for the Lender as well.
Where does Real Alternative Capital lend?
Real Alternative Capital lends predominately in the following states: Delaware, Maryland, Pennsylvania, New Jersey and Virginia.
Will I have to sign a personal guarantee?
Yes, you will always have to sign a personal guarantee UNLESS you are borrowing out of a Self Directed IRA.
Will Real Alternative Capital lend to Self Directed IRA's and QRP's?
Yes, we will require more "skin in the game" but we will in fact lend to SDIRA's.
What are the fees associated with our loans?
Origination fees will be 3 points and 13% Interest per year. Other costs are: Commitment/Valuation Fee of $450, Underwriting Fee of $950, a legal fee to our attorney directly from the HUD for $750 and inspector fee of $125 per draw.
Are there pre-payment penalties?
No, there are no prepayment penalties, but there will be a minimum amount of monthly interest payments, which is usually 3 months.
How often will I need to make payments?
All loan payments will be made monthly. Currently we do not "withhold" any monthly interest payments.
How do I make draw requests?
After the work has been completed, the borrower will send an email with a draw request form to email@example.com. Once the request is received, we will send an inspector to go inspect the work. After notification of a successful inspection, we will release the funds within 24 hours. The draw process usually takes 4-5 business days from start to finish.