Leverage equity in existing real estate to purchase a new property with little to no money down.
The PROFLIP Zero Money Down Private Mortgage is a fantastic avenue for those who have existing real estate but do not have available cash on hand to fund down payments, renovations, closing costs or interest payments. PROFLIP is a concept that allows borrowers to utilize the equity they have in an existing collateral property in conjunction with a subject property they are purchasing, in order to leverage more total equity to borrow a larger loan amount. Through a private financing medium, a lawyer will facilitate a charge registration that places a mortgage on both parcels of the borrower’s real estate. The amount of equity available in the collateral property will dictate how much more a person is able to borrow.
In this example, the borrower is able to obtain a loan of $1.3M on a property originally worth $1M because of the equity pledged in the collateral property.
If that same investor went to the bank and received 80% financing based on the subject property value alone, they would have only receive a loan amount of $800k.
By leveraging their collateral property, the borrower has access to an additional $500k to put towards their down payment and renovation costs.
In this example, the borrower is able to obtain a loan of $1,300,000 on a property originally worth $1,000,000 because of the equity pledged in the Collateral Property. If that same investor went to the Bank and received 80% financing based on the Subject Property value alone, they would only receive a loan amount of $800,000. By leveraging their Collateral Property, they now have access to an additional $500,000 that they otherwise would not have that they can utilize towards their down payment and renovation costs!
Another great point to consider is that borrowers can even pledge multiple Collateral Properties in order to obtain a desired loan amount. Therefore, if you as a borrower do not have enough equity in one Collateral Property, two can be utilized to assist with your financing objectives. This approach to financing allows for a flexible way to maximize your borrowing potential with short terms between 1-2 years that can typically be repaid at any time!
Our team would be happy to speak to you about how you can Flip like a PRO!