Fix-to-Rent DSCR Loan – Trenton, New Jersey

The Opportunity

An investor found a strong deal on 130-year-old Victorian home in downtown Trenton, New Jersey. The four-level home had six bedrooms and plenty of authentic historic touches including stained glass windows, original light fixtures, and a wood-burning stove. And with six bedrooms, a gated garden, and a four-car detached garage, it provided an ideal fix and flip opportunity.

The investor sought financing to flip the property and wanted a private lender that also offered rental financing once the flip was completed. He brought the BRRR property to Lima One.

The Solution

Lima One first financed the flip with a $298,350 loan that covered 70% of the costs. This allowed the investor to finance the $315,000 purchase and $125,000 rehab budget while leaving plenty of room for profit against the original appraised after-repair value of $459,000.

The investor completed the flip in four months and was ready for takeout financing. Because of the excellent work on the flip, the property got a post-flip appraisal of $560,000, demonstrating how much value the flipper added through his expertise. Lima One financed a DSCR loan at 70% loan-to-value on the new appraisal with a $392,000 loan. The rental loan came with no seasoning requirements and lower fees thanks to Lima One’s Fix2Rent® financing program.

The investor immediately reaped the benefits of the flip with a strong cash-out refinance option and a new property in his portfolio. By the time the rental loan closed, he was already working with Lima One on his next fix-and-flip project.