Johnson Capital Management provides cash for real estate investors. These funds are to be used exclusively for transactional funding - to buy and then sell a house or commercial property within 24 to 48 hours. SFR detached homes are our focus and will receive preferential funding over other properties.
Johnson Capital Management provides funds for the purchase of real estate only. The real estate investor is responsible for all fees and expenses related to the purchase and sale of said real estate. Johnson Capital Management shall not be held responsible nor liable for inspection fees, repairs or upgrades to the real estate, attorney or legal fees, taxes, foreclosure expenses, liens of any type or any and all costs of any kind associated with the property other than the direct purchase price and closing costs of the real estate. Real estate investors must be prepared for these other expenses and have cash on-hand or ready access to enough cash to cover these additional expenses.
Johnson Capital Management provides 100% funding up to 70% of the comparable value of the real estate including closing costs. The Company will establish the comparables for the property and notify the real estate investor of the Company's determined value of the property which may or may not differ from the real estate investor's estimate of value and from local real estate agents or from local real estate appraisers estimate of value of the property or BPO.
Johnson Capital Management will issue instructions to the closing title agent regarding loan proceeds.
Example:
An investor has located a home in a prestigious neighborhood. This home is a foreclosure property and is being offered for sale by the bank at $260,000. Comparables are at $400,000 indicating the home is available for purchase by the investor at less than 70% of comparables. Johnson Capital Management will transfer funds to the real estate investors escrow company for the full purchase price of the home - $260,000.
Example 2:
A real estate investor has received information regarding a home in good condition and available for immediate sale by a distressed seller. The seller wants to sell his home for $178,000. The real estate investor requests comparables from a local real estate agent and determines that $178,000 is nearly 80% of comparables. In this case, Johnson Capital Management would not be interested in providing transactional funding for this property.
Johnson Capital Management maintains the following fee schedule for all transactional funding:
24 hrs - 48 hours* - 2.0%
* Loans are available for up to 60 days, please ask if you need this length of loan.
Example: An investor seeks to buy and sell a home and has set the price at $100,000. The home is in good condition with no liens nor repairs required and is ready for immediate move-in. Area comparables have found that the average sale price in the neighborhood is $248,000. The home in question has a sale price of 40% of comparables. At 2.0% the standard fee would be $2,295.
Example: An investor is seeking transfunctional funding to buy and sell a home. He expects the sale to close in 10 days and the home is in good condition with only a spot paint job necessary requiring no more than $500 for paint and labor and just a few hours of work. Home comparables are hovering around $195,000. The home the investor has found is priced at $112,000 (the home is valued at 57% of comparables and the Company will provide 100% of the purchase price). The investor seeks to sell it at $173,000 or 89% of comparables. The seller has legal fees of 3% or $5,190 plus real estate agent's commission of $10,380 (6%). With repairs and the amount he owes the Company ($114,295) he receives $42,635.
Johnson Capital Management transfers funds directly to the title company. The title company is instructed that the fees in question are available solely for the purchase of the property specified in the instructions. All other expenses related to the purchase, sale, improvements, back taxes owed, lien settlement, environmental, legal, insurance or any other fees associated with the property are the responsibility of the real estate investor and must be cleared prior to the purchase of the property by the investor or may be carried over to the end buyer only upon a clear disclosure statement between the investor and end buyer which must specify all such fees and liens and must be delivered to the end buyer by the investor prior to sale.
Upon sale of the property, the title company is directed to transfer the original loan amount plus fees immediately and directly to Johnson Capital Management.
Application Documentation
The following is a partial itemization of the documentation required for application approval.
- Investors home valuation assessment (your best guess as to the value of the home or property)
- local real estate agent's home valuation estimate
- local real estate agent's comparables
- interior & exterior photos of the property
- property description (address, sq footage, # of beds & baths, garage/carport if any, pool if any
- Contractor's estimate and description of repairs required, if any
- borrower's acknowledgement of available cash to pay for closing & all related expenses, taxes & liens
- itemization of all liens, back taxes and other expenses
- Insurance company policy on the property naming Johnson Capital Management as beneficiary in event of damage or loss to property. If you do not own the property, a surety bond, described next, may be used in lieu of insurance.
- complete application
Upon receipt of the above documentation, and if all data is acceptable to the Company, Johnson Capital Management will issue a tentative approval to the loan pending:
- receipt of any further data, information or documentation the Company may determine is necessary to satisfy loan requirements
Loan Fee
There is a 2% or $2,295 whichever is greater fee. This fee is not paid until sale of the property to the endbuyer
End Buyer
The end buyer is the person or entity the real estate investor (borrower) has identified who will buy the property from the investor. An endbuyer must be in place and under contract to buy the property from the investor prior to any loan from the Company.
Penalty Fees
Johnson Capital Management provides transactional funding only for a specific duration. The amount of time the investor needs the funds is determined by the investor receiving funding. If the investor needs funding for 24 hours, a contract for transactional funding will be written transferring funds to the title company for 24 hours. Should the investor request funding for 5 days, a written contract will notify the title company that the funds in question are available for 5 days. Example: The investor may decide that in order to sell the home, a longer period of time may be required. However, he is not certain exactly how long the duration may be before the home sells. Therefore the investor may specify he wishes to hold in escrow funds for up to 60 days (the maximum).
Note to Borrowers
You must carefully assess the amount of time you will need transactional funding in order to buy and sell a home or property. You can request funding as early as you choose before the end buyer's closing date but you must always select a date for the end buyers purchase of the property. Johnson Capital Management writes all contracts on the basis that all funds released to a borrower will be returned by the borrower on a specific date. If this date should slip for any reason, we may assess a penalty fee. The penalty fee will be applied until the property has sold. Johnson Capital Management understands the real estate market and recognizes that events beyond the control of the borrower may force the expected end buyers closing date to slip, or even that a deal will fall through and the borrower must locate another buyer quickly. No affect is assessed against the credit status of a borrower if the repayment of a loan is delayed and the borrower is acting in good faith.
In all cases, the borrower must keep in mind that there is a 60 day maximum duration for any loan.
Copies of All Documentation
The investor and Johnson Capital Management are equal partners in the transaction with different but equal responsibilities and duties. All notes and documentation made by the investor or any third party about the said property sent or made available to any third party must also be delivered to Johnson Capital Management. This includes, but is not restricted to; photographs, hand-written notes, inspection forms, assessments and appraisals, environmental and insurance reports, legal and tax records, Recorder's and County Assessor's records or documentation, mortgage company documentation, past liens or notices, rent rolls, construction or repair estimates or documentation, et al. Only that documentation made or kept by a third party or made by the investor and delivered to a third party must also be delivered to Johnson Capital Management. Private notes and photos made by the investor regarding the property remain the exclusive property of the investor and Johnson Capital Management waives access or receipt of these documents.
STEP BY STEP GUIDE
LOAN APPLICATION
CONTACT US
Not Available Where Prohibited
Johnson Capital Management cannot provide funds in jurisdictions where such transactions are illegal or prohibited.
No comments:
Post a Comment