A lot of folks aren't even aware of Asset Based Lenders. These are almost always non-bank lenders, or “balance sheet lenders.” These lenders loan on the value of the property, and the potential market rate cash flow, not the existing lease or cash flow. These loans are primarily based on the potential of a property, rather than personal income.

Compared to mortgages, these are commercial purpose only loans, however some call them “Non-QM” loans, or non-qualifying mortgages. They are not subject to bank loan examiners, strict lending policies or endless need for underwriting, and can be approved in as little as a day.

These loans offer flexibility and alternative options for investors writing off much of their taxable income on a tax return. Tax returns are not even required. As a matter of fact, NO personal income is considered in the decision at all.

Some frequent questions:

Q: “But are these ‘hard money’ loans and are they only half of the value, with crazy high rates and fees?”

A: Depending on the lender, yes some are “hard money” however Lend-Creek lenders have some of the cheapest term hard money on the market. That said, borrowers with more experience in the business typically obtain terms comparable to bank loans and advances from 60-90%

Q: “Do I have to have perfect credit?”

A: No. As a matter of fact some of our lenders do not even require a credit score at all. That said, those that do can write loans with as low as a 600 credit score

Q: “Are you only going to approve some low loan advance, like 50%?”

A: Yes and no. Depending on the property, lender and loan program, we typically see advances in the 75% range, with specialty programs up to 90%. Newer investors with no experience can expect a minimum loan advance to 60%, however this can improve with the second and third property as the investor gains experience.

Q: “Can I get a 30 year fixed rate?”

A: Some of our lender's programs carry 15 and 30 year amortizations and rates. Unlike traditional FNMA or other mortgages however, most all fixed rate products carry prepayment fees which can be steep. Given the average mortgage tenure in the U.S. is approximately a 7 year term across the market, sometimes it makes sense to go long term, however often it doesn’t.

Q: ”I am buying an empty property. I will need to make repairs and improvements to the property to get it ready for a tenant. What can we do?”

A: These are called “fix and flip” loans. The lender will advance for the purchase of the property, and the repairs as they are made.
Lend Creek's lenders have programs up to a 100% advance of the repair value. 

Q: “But I already made all the repairs and improvements, I have a great tenant with a great lease, I just want to pay off my existing hard money note and hold the property long term. What can we do?”

A: Our lenders “DSCR” (Debt Service Coverage Ratio) loan is perfect for this. As long as the rent is 1-1.25x the payment, the borrower qualifies. Rates are based on coverage, and we can write down to less than a 1:1, all the way up to 1.5-2.0. The higher the coverage ratio, the lower the rate.

Q: “I have paid off properties. How much cash can I get to make other purchases?”

A: Cash outs are available typically up to 75% of appraised value. Multiple properties can even be pledged on one loan to provide liquidity, up to 200 properties in some cases.

Q: “Can I use one of these loans for a residence? Can I live in the property?”

A: NO. These loans are ONLY for commercial purposes to use as investments.

There are 1000’s of asset based, balance sheet lenders in the market. LendCreek only does business with lenders we know (often personally) and have closed business with before. We have spent years “culling” through the fly by night operators only doing business with lenders we know and trust. This is how we add value to your process and close on time.

Our goal at Lend Creek is to get your deals CLOSED, with as little hassle and effort on your part as possible. As mortgage brokers, we handle your lending needs so you can focus on what you are best at, growing your investments.