Resources

After Repair Value (ARV)

The estimated market value of a property after all planned renovations and repairs have been completed. Lenders use ARV to determine the maximum loan amount for fix-and-flip projects.

Asset-Based Lending

A lending approach where the loan is secured primarily by the value of the collateral property rather than the borrower's credit score or income. Evolutionary Private Funding uses asset-based underwriting.

Consideration

Part of the Purchase and Sales Agreement representing the purchase price, earnest money deposit, and any other obligations, such as repairs or services, promised by either party.

Contingency

A condition or stipulation in a contract that must be satisfied for the agreement to be binding. If the contingency is not met, the contract may be canceled without any penalty.

DSCR (Debt Service Coverage Ratio)

A measure of a property's ability to cover its debt obligations using its rental income. A DSCR above 1.0 means the property generates enough income to cover the loan payments.

Equity

The difference between the current market value of a property and the outstanding balance of all loans secured against it. Equity represents the owner's financial stake in the property.

HUD Statement

Also known as the HUD-1 Settlement Statement, is a document provided to the buyer and seller at the closing of a real estate transaction in the United States. It itemizes all the charges and credits associated with the closing, including loan fees, escrow terms, and other costs.

LTC (Loan-to-Cost) vs LTV (Loan-to-Value)

LTC and LTV both evaluate real estate risk, but they measure debt against different baselines. LTC divides the loan amount by the total cost to build or renovate. LTV divides the loan by the property's expected market value upon completion. Both are represented as a percentage.

Points

Upfront fees charged by a lender at closing, expressed as a percentage of the loan amount. One point equals 1% of the loan. Points are common in private money lending.

Private Money Brokers

Intermediaries who bring together and oversee the application and loan packaging process between Private Money Institutions and Real estate investors/borrowers seeking short-term funding for non-owner occupied real estate transactions.

Private Money Loan

Also referred to as a Hard Money Loan, is an asset-backed loan used primarily by real estate investors to buy or renovate property. Instead of focusing on your credit score, lenders base approval on the property's value and your investment strategy.

Private Money Lender

An individual or company that provides real estate loans funded by private capital rather than bank deposits or government programs. Private money lenders typically offer faster closings and more flexible terms.

Rehab Cost

The estimated total cost of all repairs, renovations, and improvements needed to bring a property to its target condition. Accurate rehab estimates are critical to evaluating deal profitability.

Title Insurance

A one-time insurance policy that protects property owners and lenders against financial loss resulting from defects in a property's title, such as undisclosed liens, ownership disputes, fraud, or errors in public records.