Category Archive for : ‘articles’

Article-Equalization-Financing

Non-bank borrowing for property improvements

Terrific news was announced by the CA DRE on September 6, 2019. It has now been clarified that Financial Code Sections 4970 and 4995 are not applicable to loans secured by a borrower’s primary residence as long as the loan funds are used for a business purpose. Loans for consumer use (personal, family or household uses) are subject to these high-cost loan laws.

When banks say NO or are just too slow, this is terrific news for business-purpose borrowers.

When Making Investment Property your Primary Residence

No more hopping between exclusions. The taxman figured it out!

Showcase Investments is a direct lender for 3rd-party trustee loans used throughout CA for compliance with the Prop 58 parent-child exclusion and preservation of the Prop 13 tax basis.

With so much protective equity, are private (hard) money loans made in hope of someday owning the collateral?

Investment security or eager for borrower failure, what is the motivation of private money lenders and their investors? We at Showcase Investments are private money lenders who serve our brokers and borrowers by making loans quickly and by relying on the protective equity in the property. This level of protection can range from 35% for 1sttrust deeds (65% LTV) to 45% (55% LTV) for higher-risk second position loans.

What is the investment motivation

Residential mortgage brokers have been hearing about the dearth of qualified mortgage (QM) business, and the resulting proliferation of Non-QM loans. For many real estate investors and business-purpose borrowers, these terms may become confusing, especially when also considering hard money loans, which some call “private” money. Some quick definitions and examples may be helpful.

“Qualified Mortgage”

 This term, and the inherent underwriting standards, came into the forefront with the 2010/2014 adoption of Dodd-Frank by the Consumer Financial Protection Bureau. In addition to rules regarding balloon payments, interest-only loans and much more, these

It’s in the news that those wonderful, chalky candy Valentine hearts are in short supply this year. In fact, after the ownership debacle at Necco in 2018 (auction, with Spangler Candy Company the winner, then Metropolous buying, then secretly selling to back to Spangler), Sweethearts were not produced in time for this Valentines Day. No doubt they will be back next year.

The plight of this nostalgic candy got me thinking about other classics. For example, in the food space (pardon the upcoming pun), what ever happened with Space Food Sticks?

When banks say no or are just too slow

Today’s opportunities can vanish by tomorrow. Funding speed is therefore paramount in any investor’s, attorney’s or business owner’s priorities. The quickest closing lenders fund directly from their balance sheets. These include “direct” private money lenders (DL’s), and they provide valuable “make sense” funding for a variety of uses.

FLIPPERSLong the primary users of DL loans, house flippers can finance the purchase, the repairs and often both needs from these quick-funded loans. For flippers who are short on cash or new to the business,

“It depends.” Probably one of the most frequently used terms by attorneys, this is also a favorite variable of bankers when asked if they provide construction financing for residential 1-4 unit projects. One of the most noteworthy variables is the strength of the borrower, but what if there was a desire for the project to be funded less on the client’s credit worthiness and more on the equity of the project?

Private money construction loans, like those from Showcase Investments, may be a perfect solution for these borrowers. For ground-up projects,