Builders Capital

About Builders Capital

Builders Capital is hard money lender headquartered in Seattle, WA. They offer loans throughout Washington and Oregon. They offer ground up construction loans, fix and flip loans, and short term bridge loans. They offer terms between 2 months and 15 months and loan amounts ranging from $100,000 to $100,000,000 with a maximum LTV of 70%. The focus of their loans is for single family, multi family, and apartments.

Loan Types Offered: Fix and Flip Loans, New Construction Loans, Bridge Loans

Property Types Covered: Single Family, Multi Family, Apartment

Areas Served: WA, OR

Loan Example 1

Kim finds a duplex in Portland, OR to renovate and sell. Since she does not have enough cash available to purchase the $330,000 house outright, she decides to take out a fix and flip loan from Builders Capital. The loan to value (LTV) on the note is 50%. This means that Kim will need to bring 50% of the purchase price to closing and the principle will be $165,000 on the note. The parameters of the note also include a five percent origination fee which is to be paid at closing and a 6 month, interest-only note with a 11% interest rate.

Kim will have to contribute $165,000 to the closing (50% on the 50% LTV), plus she will pay the $8,250 origination fee. After the loan closes, she will pay the lender $1,513 in monthly interest fees, or 11% times $165,000 divided by 12 months in a year. If she sells the renovated project for $445,500 at the end of the 6 month term, her total profit (not accounting for renovation expenses) would be $98,175. This is computed by taking the sales price ($445,500) and subtracting the original note amount ($165,000), the origination cost ($8,250), the money she brought to closing ($165,000), and the total interest expenses ($9,075).

Loan Example 2

Gordon is a an investor in Portland, OR. He finds an older townhouse for a rehab project and obtains a fix and flip loan from Builders Capital with the following features:

a) A $310,000 sales price, b) a 70% loan to value (LTV), c) a 6 month term, d) a 13% interest rate, and e) a 5% origination fee.

Assuming a $434,000 sales price at the end of the 6 month term, the numbers for the deal would look like the following:

$434,000 sales price
- $217,000 principle on note (70% LTV)
- $93,000 down payment (30% on 70% LTV)
- $10,850 origination points (5% of the $217,000 principle amount)
- $14,105 total interest paid (6 months x 13% interest)
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= $99,045 total profit (doesn't include taxes or rehab costs)

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