Johnson Capital Management provides 100% financing to real estate investors for transactional funding. transactional funding is when a real estate investor has located a property for purchase and intends to "flip" the property - sell it quickly.
We deal only with transactions involving single family homes with an end buyer in place.
The process of receiving funds from Johnson Capital Management may appear complex, but we provide this step by step guide to make your loan as easy as possible. We also provide email support. If you have any questions regarding your loan application or status, just shoot us an email and we will be happy to help you.
Let's take a look at an example.
Investor Abraham Lincoln has located a property in a suburb of Chicago that he thinks will make an excellent "flip" property. the home is in good condition, in move-in condition.
Mr. Lincoln has made a discrete inquiry and has determined the bank will sell the property for $120,000. Home prices in the area are $210,000, (comps). This represents 57% of comparable values for the neighborhood.
Our investor has his cash tied up in other investments and seeks out hard money lenders, but he discovers they typically charge as much as 18% and often charge points as well. Coming across our information, Mr. Lincoln decides to review our website.
Abraham believes he has a buyer lined up and begins our loan application process.
The first step is to complete our on-site loan application. This includes information about the property, its estimated vale, proposed sale price, its address, end buyer information, and information regarding the applicant.
Mr. Lincoln then follows the checklist and contacts a real estate agent for area comparables. The real estate agent must send us these comparables directly to Johnson Capital Management, the applicant cannot forward these to us, only the agent may send these to us for Johnson Capital Management to consider the comparables as valid.
The real estate agent must also send us his/her estimate of the value of the property.
Next, Mr. Lincoln contacts a local contractor to inspect the property and provide an estimate of repair and rehab costs if any. In this case, the contractor notes a broken faucet, a carpet that needs replacing and a small stain on a wall requiring a fresh coat of paint. The contractor estimates total repairs and fix-up at $1500.
The contractor then sends us his estimate. It is okay if he provides this estimate to Mr. Lincoln to forward to us. Abraham sends us an email with the contractors estimate.
For the next step, Abraham asks the real estate agent to take several photos of the property, 5 interior and 5 exterior photos are all that is required. These can be either emailed to us or posted on Flickr or some other site for us to review. Just send us an email with the url so we can find the photos. If there are any damaged areas of the property or areas requiring fix-up or repair, send us these photos also.
Mr. Lincoln has sufficient funds to cover repairs. After the contractor has completed repairs, (which the current owner has allowed) Abraham contacts Johnson Capital Management to inform us of his proposed closing date. The seller's bank requires that Abraham provide proof of funds and Abraham thinks he should have the money at the title company within 2 days. Johnson Capital Management has received all the paperwork we require and we have determined that no additional documentation is necessary; we then issue a tentative approval of the loan.
The loan committee approves Abraham's loan 24 hours later and wires $120,000 to Abraham's title company. The bank contacts the title company for Abraham's proof of funds and is informed that Abraham has funding in escrow sufficient to cover the purchase price of the home. (Mr. Lincoln could have requested a Proof of Funds letter from Johnson Capital Management which we provide for free. We will also provide VOD (verbal or written Verification of Deposit) to the requesting bank, seller or title company upon request).
Abraham has had an ad in the paper regarding the property he has under control (but not purchased), and a firm commitment from a buyer. 24 hours after receiving our funds, Abraham and his buyer meet at the title for a double closing.
Abraham has sold the property for $183,000 - a bit less than his projected $190,000 - but still receives a gross profit of $63,000. After our deductions, $2,400*, the title company issues a check to Johnson Capital Management for $122,400. Closing costs are 8% or $14,640 leaving a gross profit of $45,960. Mr. Lincoln receives a check from the title company for $45,960. Mr. Lincoln is very happy.
* Interest charge. The standard charge on Abraham's loan of $120,000 would be $2,400, (2%).
To get started, either contact us for more information or begin right away by filling out our loan application now.
Johnson Capital Management
