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Who We Are?

Fidelity Residential  is a relationship-based private money lender to top tier home renovators.

Facts About Fidelity Residential

  • Leading full service private money lender to top tier home renovators.
  • Streamlined borrower approval process allowing closing in 7 days.
  • Best Rate/Low Fee Guarantee.
  • Our goal is to provide the absolute highest level of service to our clients.

We pride ourselves on our transparency and professionalism, our rapid response times, and competitive terms.  We have a unique best rate/low fee guarantee assuring clients that they will always receive the best terms available in the marketplace.  Our mission is to deliver the lowest cost loan while maintaining the highest level of service and efficiency.  We accomplish this by leveraging our own funds, utilizing our proprietary private investor base, and accessing our correspondent relationships with various private equity firms and crowd funding platforms.  Our ability to search for the best terms across various funding sources, provides a significant cost savings to our clients.  Through years of working with in the lending industry, Fidelity Residential has developed a streamlined borrower approval process, as well as a keen understanding of the developing business.  With acquisition financing and renovation loans up to $5 million per home, we stand out as one of the fastest growing private money lenders.  Our state of the art crowd funding platform partnerships afford investors and borrowers alike a unique opportunity to leverage their self-directed retirement accounts and/or personal savings to offset their total cost of investment capital. The delta between the rate on the Hard/Private money loan and the yield on corresponding investments can reduce the overall cost of capital to 2%.  Founded by Robert & Aimee Shamie, Fidelity Residential is excited to be part of the area’s renaissance and we aspire to continue contributing to the economic rejuvenation across our operational footprint.

Since its inception, Fidelity Residential has passionately pursued the goal to help people in our community find an answer to their real estate needs. Through the years, they’ve developed a solid foundation of real estate knowledge, with the integrity to follow up on promises and make successful deals happen.

our mission

When a passion for real estate is combined with talented individuals who have an uncompromising drive to succeed, amazing things will happen.  At Fidelity Residential, it’s our goal to not only have a positive effect on ourselves and our families – but also to inspire, motivate and create lasting change in everyone we encounter.  We will treat our clients and team members with respect at all times.  Our motto is and will always be, “Where there’s a will, there’s a way – and failure is merely lack of effort.” Our company will dedicate itself to everlasting education and professional growth that will make the leaders of tomorrow.

Aimee Shamie, Co-OwnerRobert Shamie, Co-Owner

 

 

robert-aimee

 

The Story of Fidelity Residential

Robert and Aimee Shamie have been happily married for over 17 years.  Luckily, they met and fell in love at an early age which afforded them the opportunity to focus on their education and career goals.  When they first met, Aimee was studying at the University Maryland and Robert owned and operated discount retail stores in the New York Metropolitan area.

Upon graduating from the University Maryland in 1998, Aimee began her legal studies at Rutgers University In Camden, NJ.  In 2001, she earned her juris doctorate degree and began clerking for the honorable Clarkson S. Fisher, Jr. in the Chancery Division at the Monmouth County Courthouse.  Upon concluding her clerkship, Aimee focused her legal practice in commercial litigation.  After many successful years in practice, Aimee took time off to raise her three wonderful children, Eddie, Zachary and Rachel.

While Aimee was at home raising their children, Robert, in search of a better quality of life, sold his New York retail stores and began his career in the Mortgage industry.  In 2003, Robert joined Financial Resources, a mortgage bank located in Monmouth county New Jersey.  With no experience and a desk set in a busy hallway, he learned everything there was to know about the lending business by systematically analyzing and documenting eveyone’s job.  This included loan origination, marketing, compliance, processing, underwriting, funding, closed loan sales

and correspondent investor relations.  After only 1 year in the business, Robert rose from the basement to Vice President of the company with loan originations totaling 75,000,000 per year.

In 2009, Robert founded US Mortgage Capital which he continues to own and operate today.  US Mortgage Capital is a highly sucessful, full service, online mortgage bank, and a licensed  lender in  25 states across the country.  US Mortgage Capital specializes in Conventional, Jumbo, FHA, VA, USDA and Alternative documentation loans.   Managing a large pipeline of loans requires a constant bond market analysis and complex hedging which led Robert to the next challenge.

In 2010, Robert began investing profits from US Mortgage Capital into many asset classes including Equities, Bonds and Options.  Today, Robert continues to actively manage his personal portfolio and those of his family; trading 1000’s of times per year.  Through his keen knowledge for timing and research, he has consistently achieved returns between 17% and 28% when including dividend reinvestment.

In 2016, after receiving a prominent mortgage industry newsletter, Robert discovered the Fortune Builders Mastery program.   A college for mastering real-estate investing.  Seeking a better quality of life for his family, he immersed himself in the program and was immediately attracted to lending and real estate investing based on his background.  Adhering to his education and passion for learning, Robert & Aimee formed Fidelity Residential with a prime objective to assist homeowners and investors in achieving their financial goals.  Today Fidelity is actively investing in the community by rejuvenating neighborhoods and funding loans for other investors to do the same.

 

houseforsale

 

We’re highly motivated, knowledgeable, ethical, and
qualified to handle any real estate transaction.
We are committed to helping people with their real estate needs
and making successful deals happen

Company Credentials

Certifications

HML’s AL, CA, CO, CT, DC, DE, FL, GA, IA, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, NC, NE, NH, NJ, NM, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY

Conventional, FHA, VA, Licensed Mortgage Banker as US Mortgage Capital in  CA, CO, CT, DC, FL, HI, IL, KY, MD, MI, NV, NJ, NM, NY, NC, OH, OR, PA, TN, TX, UT, VA, WA.  Mortgage Bankers Association, HUD, FNMA, FLHMC

Real Estate Knowledge & Experience:

We have invested a great deal of time, energy and capital investment into our real estate education, attending the nation’s premier real estate investing education program – FortuneBuilders Mastery.  Beyond the principles of sound investing, we were trained on how to build a successful business based on systems and predictability.  Having completed 1,000’s real estate deals, FortuneBuilders coaches and systems have allowed us to strategically invest in real estate, grow and expand our business, and they are available for us to leverage when analyzing our real estate deals.

Best Rate/Low Fee Guarantee:

We are so sure that you will get the lowest cost loan from Fidelity Residential, that if you find a better offer, we will beat it!  Send us a copy of our competitors terms and within 24 hours, we’ll beat it!

 

Company Business Model

Overall Lending Approach

Our overall lending strategy is to analyze all available funding sources in the marketplace.

Our Business Strategy

  • Guaranteed funding via a range of institutions and private investors.
  • 32 Point underwriting assessment system
  • We provide capital at the most completive terms.
  • We close deals in a fraction of the time it takes through a conventional bank

We are constantly cementing new relationships to reduce the overall cost of capital to our clients.  Through our partnerships, we  provide clients access and direction on how to achieve a lower cost of capital to fund their rehabilitation projects.

We will analyze the risk involved in a specific project and determine the most suitable and cost effective source of funds.  In many cases, we use our own funds and warehouse lines of credit to fund loans.  In other cases, where we can provide the borrower with a lower cost loan, we may access our crowd funding relationships.  Crowd funding refers to regular accredited investors being afforded the ability to invest in shares of a specific lending transaction.   The purpose of the crowd funding is the same as a hedge fund or warehouse line of credit;  To provide liquidity to the originator of the loan.  By replenishing our own funds via crowd funding, our resources are freed to make another loan to another borrower.

 

 

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online syndication forum

Monitor new projects as they become available for investment. Invest in one project or a variety of projects while managing your entire investment online.

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investor research

Access appraisals, budgets, title reports, borrower track records and more.

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Dynamic Social Funding

Monitor Investment fundings as other investors acquire stakes in different projects.

Company Business Process

At Fidelity Residential, we pride ourselves on having a strong foundation of real estate knowledge and training.  Our focus is on providing SOLUTIONS for our clients and finding VALUE for our clients by providing innovative and cost effective funding resources.

Our core business lies within our systems, education and knowledge of the lending industry.  We have spent thousands of dollars to learn how to be successful in this business and do it the

We Follow a Strict Due Diligence ProcessWe have a systematic and disciplined approach when underwriting loans, putting each potential borrower through a strict due diligence process. This rigorous set of criteria includes, but is not limited to, the following:

  • Loan to Value, Loan to Cost
  • Lien Position
  • Location
  • Occupancy
  • An economic study of the neighborhood, city planning and development
  • Sponsor (Borrower’s) Track Record
  • Sponsor (Borrower’s) Experience
  • Credit Score
  • Personal Guarantee

right way the first time.  Our simple yet powerful underwriting matrix helps us determine risk and assign a score to each borrower.   The higher the score, the higher the risk.   The risk score also determines the terms which the borrower will receive.  For example, a risk score of 1 will receive a lower rate than a risk score of 5.  Certain attributes carry a positive values and others a negative.  We combine all the values to achieve a final risk grade.  Once we assign a risk grade to a particular borrower, we can begin analyzing the loan for the most favorable source of funds.

 

  • AUTOMATED
    Pre-Approvals

  • PROPERTY
    UNDERWRITING

  • RISK
    CLASSIFICATION

  • BORROWER
    ANALYSIS

Company Underwriting Model

Simple Underwriting Risk Matrix

The grid below measures nine key risk criteria.  Each of the criteria is assessed and assigned a number of points, resulting in a total numerical score ranging from 0 to 25.  A project score of 8-11 will result in an A rating, 14-15 in a B+ rating and so on.

 

 

Lending Parameters

We value our unique relationship with our borrowers and as well as the unique circumstances of each of our deals.  The Lending Parameters provide general guidelines to Fidelity Residential Lending.

Loan Amount$ 100,000 to $ 5,000,000Rate8 % to 14 %Loan-To-Value80% of the total amount required to purchase.Loan-To-Cost80% including renovation costs. 80% of total project value or 65% of the After Repair Value (ARV).

Loan Amount $ 100,000 to $ 5,000,000
Rate 8 % to 14 %
Loan-To-Value 80% of the total amount required to purchase.
Loan-To-Cost 80% including renovation costs. 80% of total project value or 65% of the After Repair Value (ARV).
Term 3 to 18 months
Origination Fees 2 to 5 pts, depending on loan duration
Closing Time 7 to 14 days
Recourse Personal guaranty required in most cases
Required Insurance Title insurance naming lender as insured and property insurance naming lender as additional insured and loss payee
Collateral Type First trust deed on subject property
Type of Loans Acquisitions, Renovations/Construction, Refinance, New Construction
Type of Properties Single Family & Multi Family Homes, small unit residential developments, mixed use, commercial
Lending Area AL, CA, CO, CT, DC, DE, FL, GA, IA, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, NC, NE, NH, NJ, NM, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY

 

The Lending Process

 

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project analysis

We analyze the project timeline, budget, scope of work, achitechtual plans and title report.

Capital analysis

Next, we do a detailed analysis of the budget, projected profit margin, cost of capital, contingency financing and exit strategy.

Property analysis

Third, we review market conditions, demographics, trends and a detailed appraisal by a certified licensed appraiser.

Borrower analysis

Fourth, we vet borrower’s credientials, experience, and sucess ratio. We analyze the borrower’s credit profile, litigation history and prior defaults.

Legal Compliance

Fifth, we review the borrower’s entity structure, operating agreements, state and federal filing statuses.

Reporting

Finally, we provide investors with financial statements, tax filings, videos, photos, and project status reports on a regular basis.

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...

project analysis

We analyze the project timeline, budget, scope of work, achitechtual plans and title report.

...

Capital analysis

Next, we do a detailed analysis of the budget, projected profit margin, cost of capital, contingency financing and exit strategy.

...

Property analysis

Third, we review market conditions, demographics, trends and a detailed appraisal by a certified licensed appraiser.

...

Borrower analysis

Fourth, we vet borrower’s credientials, experience, and sucess ratio. We analyze the borrower’s credit profile, litigation history and prior defaults.

...

Legal Compliance

Fifth, we review the borrower’s entity structure, operating agreements, state and federal filing statuses.

...

Reporting

Finally, we provide investors with financial statements, tax filings, videos, photos, and project status reports on a regular basis.

 

Follow These Six Easy Steps to Get Through The Loan Process…

Step One: Application

Complete and submit the Initial Loan Application contained on our website or request one in .pdf format via email to info@localhost.  Once submitted, your Initial Application will be quickly reviewed by our pre-approval team and you will be told what loan terms can be offered in your particular situation.  If appropriate, we will issue a Letter of Intent, Loan Term Sheet and/or Loan Commitment based upon the facts of your Initial Application.  If you are not an appropriate candidate for a loan, or we cannot help you, you will be told that immediately.

Step Two: Documents:

If you are preliminarily approved, we may ask you to provide additional information and documentation including, but not limited to, the following items:

  • Copy of Sales Contract and any deposit check(s).
  • Copy of Driver’s License.
  • Copies of any appraisals or inspection reports of the Property; * If you are an entity borrower, you will need to provide copies of all your corporate documentation.
    • Articles of Incorporation
    • Filing Receipt
    • Tax ID Number from IRS
    • Operating Agreement/By-Laws
      • Must include all member names
      • Must include all amendments
    • Corporate Resolution (if applicable)
    • Certificate of good statement from the home state of your LLC or S-Corp
  • Addresses of any cross-collateral property, if any.
  • High level list of proposed repairs
  • Proposed draw schedule
  • Proof of funds covering borrower’s contribution. For example, if you are obtaining a loan for 80% of the purchase price and 80% of the rehab costs; Evidence you have the 20%.
    • Asset account statement
    • Settlement statement from another property recently sold with sufficient proceeds
  • Detailed list of material and labor costs
  • Copies of any contractor estimates or contracts
  • Personal financial statement
  • Renovation budget
  • Track record documentation. Deeds, Closing Statements or verifiable proof of ownership. List of previous real estate investments made including the following information:
    • Property Address
    • Purchase Price
    • Rehab Money
    • Sales Price
    • Sales Date
  • Credit card authorization for investor refundable deposit for due diligence and/or appraisal.
  • ACH Authorization with voided check. Authorization to deduct monthly interest only payments (if applicable) from your business checking account.
  • Upon preliminary approval, you will be asked to pay for any 3rd party costs including; property valuations, credit reports, inspections, etc. The amount of this fee will be disclosed to you ahead of time.

 

Step Three: Appraisal and Title:

Upon receipt of all documentation and payment of Application Fee, title to the property will be ordered and examined and, if required, an appraisal and/or property inspection will be ordered.  The appraiser or inspector will contact you or your agent directly to set up a day and time for inspection.  Payment for the appraisal and/or property inspection MUST be paid by at or prior to the time of inspection and is NON-REFUNDABLE.  You will be told the cost for these inspections at the time the appointment is set up with you.

Step Four Insurance & Closing:

 

Assuming there are no appraisal, inspection or title issues, loan funds will be made available to you through a closing/settlement with a title company, AFTER you have provided evidence of General Liability Property Insurance in an amount equal to the total loan amount.  If you are doing rehab work, you may be required to obtain a Builder’s Risk Policy, and if the work is being done by a contractor, he or she must provide a copy of their General Liability Insurance and Proof of Workmen’s Comp Insurance.  You will be responsible for all closing and insurance costs.  If you are in the negotiation process, we encourage you to get the Seller to contribute as much as possible toward closing costs.  The lender will not care and it will keep your “in” costs as low as possible.

 

 

 

Step Five: Construction/Rehab Draws:

If your loan is a rehab/construction loan, you will most likely have to establish a construction escrow with the Lender.  Our investors generally require 3-4 draws.  At each completion phase, you must call us to have a property inspection arranged.  Once approval is obtained and/or mechanic’s lien waiver executed, the lender will release the draw.  The final draw is NEVER released until the project is completed.  You will be responsible for construction draw inspection fees, which generally range from $150.00 – $200.00.  These fees must be paid either at time of inspection, or sometimes up-front at settlement.

Step Six: Sell or Refinance:

Within the pre-determined loan term, you must sell or refinance the property to make certain the lender receives a full payoff of his or her loan.  If you planned and executed your acquisition and exit strategy appropriately, you should be walking away from the project with a big payday.  You are welcome to use your pre-approval from your first successful deal to receive other loan commitments! Your approval process just got easier, as you no longer need to re-apply the next time you find your next “hot” real estate deal.

 

Investing

We Aprotect Our Investors

Mortgages offer the banks solid, long-term, fixed returns. You can put yourself in the position of the bank by directing your investment capital, including retirement funds to well-secured real estate mortgages.  Mortgages have ultimate safety because if default occurs, the bank can recover its investment as the first lien holder on the property.

 

 

Each property we lend on is put through a rigorous evaluation process in order to assess risk and exit strategy in the event of a default. “lntegrity” is an essential part of our business, and we only make sound investment decisions.  Also, for your protection, you are also provided these documents to secure your investment capital:

 

Borrower Payment Dependent Note (BPDN): This is your collateral for your investment capital. The investor is afforded the ability to select which Hard/Private money loan they wish to invest in.   This proprietary platform affords the investor the ability to select any dollar amount they wish to invest in a particular note.   An investment for less than the total note amount provides the investor fractional shares in the performance of the underlying note.  The return on the investment is based on the borrower’s payment performance only, not a pool of loans.

Deed of Trust/Mortgage: This is the document that is recorded with the county clerk and recorder to publicly secure your investment against the real property that we are providing as collateral.

Hazard Insurance Policy: This is where the investor would be listed as the “Mortgagee” as protection in case of fire or natural disaster, etc.

We obtain a title search as well as a title policy on the home just as we would in a typical transaction. For a rental investment with a long-term note, we always keep a valid hazard insurance policy on the property to protect against causalities.  The investor is named as a mortgagee and notified if the insurance was not kept current.  In the event of any damage to the property, insurance distributions would be used to rebuild or repair the property, or used to repay the investors.

Leverage a Self-Directed IRA Account or your personal savings to reduce your cost of investment capital to 2%!

 

Most people think that an IRA can only be used to purchase investments, like stocks and mutual funds.  But that’s not true!  You can get private mortgage loans using the funds which are already in your IRA’S and other retirement plans.

As it pertains to lending for real estate investments, enter the Self-Directed IRA.  The IRS has set forth guidelines on what you can and cannot invest in with your IRA.  Many people are surprised at the scope of options available.  From tax liens, gold, real estate investments and real estate notes, IRA’s are much more powerful than most people ever realized.   If you add to that power of a Roth IRA which allows you to enjoy your earnings tax-free or deferred, and you’ve got a fast road to an easy retirement!

Reduce your cost of capital to only 2% by leveraging our proprietary crowd funding investment platform. Retirement Accounts That Can Be SelfDirected

  • Roth IRA’s
  • Traditional IRA’s
  • SEP IRA’s
  • SIMPLE IRA’s
  • 401k (solo)
  • 401k (qualified plan)
  • Educational Savings Accounts
  • Health Savings Accounts

*Profits can be tax free or tax deferred when you invest with one of these vehicles. Consult with your tax adviser first.

However, in order for you to use retirement accounts for loans, they must first be administered by a third party custodian.  After selecting your custodian, you simply send a transfer form to them and they’ll do all the work for you.  You can even form a Solo 401K to gain check writing privileges.  We would be happy to recommend a local custodian we’ve worked with in the past who can assist you with setting up your account.

Once you have set up your account, you can utilize our exclusive crowd funding platform to reduce the cost of your investment capital by leveraging the assets in your self- directed retirement account.  If you don’t have a self-directed IRA, you can use your personal savings.  For example, let’s say you were to secure a private money loan from Fidelity Residential at 12%.   Our crowd funding platform will allow you to invest in Borrower Payment Dependent Notes (BPDN’s) secured by the same mortgage and property.  The yield on your note will be 2% under the rate you pay on the Fidelity Residential private money loan.   Effectively reducing your cost of capital to only 2% NO MATTER WHAT RATE YOU RECEIVE ON THE PRIVATE MONEY LOAN!  Even if your rate on the loan is 20%, the yield on your BPDN will always be 2% less.  Therefore, your cost of capital will always effectively be reduced to 2% using this strategy.  If you consider that the yield earned on the BPDN is tax free when using a retirement account, you may actually earn a profit on the loan that you receive from Fidelity Residential.  More importantly, your investment is tied to your own ability to repay the loan.  Why invest in others when you can now invest in yourself and simultaneously borrow at only 2%.  If you are not comfortable investing in yourself, invest in your friend or mentor’s BPDN.  Either way, you will have reduced your cost of capital!  For questions about how to leverage this  valuable program, please contact us immediately.  Stop overpaying for your money!

Investment Terms & Conditions

Terms & Conditions

 

Minimum Investment:

When working with private lenders, $50,000 is typically the  minimum standard investment. When first investing with us, there is no minimum investment.  You can invest as much or as little as you like.  You can invest in a loan to your own project or another investors.

Mortgage Terms:

The majority of our loans are set up on an 6-12 month note; however, it depends on the size of the project. If we are doing a teardown and rebuild, we will have to wait on the county inspectors for many approvals – thus causing delays. We account for all of those details upfront and will give you estimated time frame for the return on your investment. Also, we do not pool funds – your funding will be tied to one piece of property..  A borrower payment dependent note will be issued to you.  This entitles you to a percentage ownership in the underlying note.  Our obligation to make payments on the Notes is entirely dependent on us receiving a payment from the corresponding borrower.

Payment Schedule:

A borrower payment dependent note we will pay monthly just like a typical mortgage.

1st or 2nd Lien Position:

Investment Terms & Conditions

  • Minimum Investment – None
  • Interest Rate – 10% on average
  • Payment Schedule – paid monthly on the 1st of the month
  • Mortgage Terms – 12 months (projects usually completed in 3 to 6 months)
  • Return of Principal and Interest – paid back at closing
  • 1 st or 2nd Lien position
  • Option to renew
  • All documents recorded

The Investor, as “mortgagor,” has the right of first lien holder and Power of Sale on the property. The 1st lien position is placed behind a senior mortgage. You are probably used to hearing the term first and second mortgage. The second mortgage is a junior lien because it’s in 2nd position. The senior lien or first mortgage must be paid prior to the 2nd lien.

Who can invest:

Currently, only accredited investors and non-US persons can invest through the crowd funding platform.  An accredited investor has a net worth of $1MM (excluding their primary home) and/or has a consistent annual income of $200k ($300k per if married).  However, our position may change when Title III of the JOBS Act is implemented.  In order to have investment access, you’ll need to obtain a letter from your CPA documenting your accreditation or provide evidence of your income and/or assets.

Taking the Next Steps

Getting Started With Us

If you haven’t already, it’s important that you submit an application, even if you haven’t found a property to invest in yet.   We can issue you a pre-approval commitment based on a specific dollar amount and also issue you a proof of funds letter.

Please contact our office by phone at  732-686-9999 Option 3 or send us an email:

Robert Shamie: rshamie@localhost

Aimee Shamie: ashamie@localhost

Referral Program

Word of mouth is typically how we are able to find our best clients.  It would be greatly appreciated if you passed our information on to anyone that may be interested in a loan from Fidelity Residential.  In our business, it’s always important that we have a steady stream of borowers.  Once you’ve done a few deals with us and you’ve learned how we deliver the best terms, we hope you’ll share our contact information with your colleagues, friends and family.

 

Frequently Asked Questions

How quickly can I get a Hard/Private money loan?

One of the greatest things about a hard and/or private money loan is the speed at which you can get one.  Sometimes approvals can be granted in as little as 24-48 hours and settlements can take place in less than a week.  Remember, however, that the lender will have to make an appraisal of the property, order and inspect title work, and have lender documents drafted.  This could take anywhere from days to weeks depending on the circumstances but, in an emergency situation such as foreclosure, we may be able to speed up the process to accommodate you.

Can I get a pre-approval letter?

Yes.  If your real estate transaction requires a lending pre-approval letter, one of our underwriters can provide that to you, most of the time in the same day it is requested.

What are the lender fees?

There are no “set” fee schedules.  However, Hard/Private money loans generally cost 2-5 points.  One point equals 1% of the loan amount.  Some or all of these points may have to be paid up-front, but many times we will let you build the points into the back of the loan (we will increase the loan amount to cover the points).  You will have to pay for an appraisal of the property, some document preparation fees, and perhaps some underwriting and/or application fees.  Any required fees will be disclosed to you up-front.

When is a Hard/Private money loan not appropriate?

Hard/Private money is not appropriate in some circumstances:

When you need money “long term.”  Most Hard/Private money deals are for no more than 6 months to 2 years; When the deal is “tight.”  Don’t look for Hard/Private money loans higher than 65-70% of the conservative property value, if that.  Hard/Private money lenders aren’t interested in losing money, and the only way to insure that is to lend based upon very conservative loan-to-value ratios.  Not many Hard/Private money lenders are looking to get involved in farm operations, mobile homes, or geo-desic domes.

Principal residences.  Fidelity Residential is not properly licensed to provide loans to owner-occupants.  We only lend on commercial or investment properties.  If you need to borrow on a primary residence, please go to our sister company, US Mortgage Capital, www.usmtgcapital.com.  US Mortgage Capital offers a variety of financing options including but not limited to, Conventional, Jumbo, Alternative Documentation, FHA, VA, USDA loans.

Will you lend on a primary residence?

No.  State and Federal laws have strict disclosure requirements for consumer mortgage loans, as well as “caps” on fees and interest rates.  Fidelity Residential is not licensed and does not lend on primary residences.  If you need to borrow on a primary residence, please go to our sister company, US Mortgage Capital, www.usmtgcapital.com.

I am days away from foreclosure. Can you help? Can I get a loan?

Maybe.  Fidelity Residential can close quickly, so depending on how soon your upcoming foreclosure is, we may be able to close a loan beforehand.  If not, there still may be many options available to you to stop the foreclosure proceeding.  If you contact us, we will try to help you find a solution.  And remember to always review all your options with a real estate attorney or consultant experienced in these matters.

Why shouldn’t I just use my home equity credit line?

You can, and certainly the interest rate is bound to be much lower than a Hard/Private money loan.  Just remember that the more credit you take out on existing credit lines, like the ones you may have on several of your rental properties, the lower your credit score will go, as potential creditors don’t like to see you “maxing out” your open credit.  It is a sign of potential distress.  Most Hard/Private money lenders are private companies or individuals and do not report to the credit bureaus, so your credit scores are better protected.

What are the loan terms?

Every Hard/Private money deal has different lending criteria and different point structures and interest rates.  As a general rule, count on an interest rate anywhere from 9-15%, and you will probably have to pay anywhere from 2.5 -5 points depending on your risk score. Sometimes we will require points to be paid up-front at closing, while other times we can build them into the loan amount.  We have come to find that each Hard/Private money deal is unique and it is impossible to provide exact numbers and loan structure until the deal is reviewed and approved, although all loan terms are always disclosed up-front and long before settlement.

Are there pre-payment penalties?

Sometimes yes, sometimes no.  It varies from deal to deal.  Because much of the money used for Hard/Private money loans comes from private investors who want to keep their money “working,” we often require minimum guaranteed interest periods.  Once your deal is reviewed, part of the approval process will be advising you of any such pre-payment penalty or guaranteed interest period.

Can I get cash-out to pay tax liens, judgments or other debt?

Judgments and liens that appear on your title must be paid off at closing but, after payment of these items, you may use any additional equity in your property to get cash at closing up to the “loan-to-value” limits.

For instance, if you have a property valued at $100,000.00, and owe $30,000.00 in tax liens, and we approve a loan for 60% of the value of your property, then you will be able to take an additional $30,000.00 at closing for your own use, less any applicable closing costs and lender fees.

What documents do I need to get started?

Before providing documents, you should first complete our Loan Application.  Once we determine your loan fits within our lending guidelines, our underwriter will tell you what documents you need to provide.  If you have an appraisal of the property, you may want to provide that to the underwriter up-front at time of application.  This will help determine the viability of the deal. If you want to get an idea of what might be asked for, a complete list has been provided in this document.

Do you allow secondary financing or seller-held notes?

Usually yes.  Although there are times when we will not allow secondary liens, most times we don’t worry about where you come up with the remaining money to buy the property, whether from a relative, seller held promissory note.  As a first lienholder, the lender’s money will be the first amounts paid back upon foreclosure and, thus, usually doesn’t care about a second note holder.  In some cases, the investor will want to see that you have sufficient assets to cover the amount of the second lien.  For example, if you were taking out a second lien to cover repairs of 20,000, the investor will want to see that you have assets totaling 20K even though you are borrowing the funds from someone else.   Those assets can be in any form such as stocks, bonds, life insurance, or savings.  Usually investors with these requirements, will offer better terms since their risk is lower if you have reserves in the bank.

Do you check the title? Are there title fees?

Yes.  As with a conventional loan, we will require you to pay for a title search of the property to make certain that you have proper title to the property and the lender is being put in proper first lien position.  You will also have to pay for the title/escrow company to close your loan, record a mortgage or deed of trust in the land records, and issue lender’s title insurance to protect the lender’s interest in the property.

Is there a limit to the number of properties I can buy?

No.  Each deal stands on its own.  If it makes good loan sense, you will get the loan regardless of how many properties you own

Do I have to put my own money in the deal?

Sometimes.  We will generally lend you up to 65% of the property value and, unlike a conventional lender, will not reduce the loan amount just because the purchase price is much lower than the property value.  Thus, if you buy right, you may be able to get a loan for 100% of the purchase price, although most times we require you to at least pay closing costs.

For example, if you find a property worth $100,000.00 and get the sellers to unload it for $60,000.00, we may well give you the full $60,000.00 purchase price.

On the other hand, if you are buying a rehab property that is worth only what you are paying for it until such time that it can be repaired, we will most likely will do one of two things:

1) give you only up to 65% of the purchase price (which means you must find the other 35%); or 2) give you the full purchase price and require you to establish a construction escrow to insure you make the repairs to increase the value to an amount substantially higher than the original purchase price.

DO I NEED AN APPRAISAL?

Yes.  We determine value in several different ways: 1) appraisal from a licensed appraisal; 2) appraisal from real estate broker (Broker Price Opinion); and/or 3) internal appraisal by our underwriting team.  You will be charged up-front for our valuation of the property and we will obtain the type of appraisal that best allows us to determine value.  These fees are non-refundable.

WHERE DO YOU LEND?

AL, CA, CO, CT, DC, DE, FL, GA, IA, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, NC, NE, NH, NJ, NM, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY

I have a low credit score. Can I get a Hard/Private money loan?

In most cases, we require a minimum credit score of 650.  However, this will depend on your “exit strategy.”  For instance, if you have found a great deal on a property from a distressed seller, and you intend to merely “flip” the property and all you need is short-term capital to carry you until you re-sell the property, credit scores are not that relevant.  If, however, you intend to rehab the property and carry it as a rental, then you will be need to refinance out of the Hard/Private money loan.  In such a case, we will take a close look at your credit to determine why your scores are low and will make sure you have the ability to refinance the loan before risking capital in the deal.

Do I need to provide personal income statements?

Maybe.  Every deal is different.  Once your deal is preliminarily reviewed, you will be told by the underwriter which documents you will need to provide.

Are you a licensed lender?

Fidelity Residential  is not a licensed “mortgage lender” and does not lend money on primary/principal residences.  We are a commercial/investment lender.  All our loans are either funded by us or by one of our private capital sources or through our crowd funding platforms.  In some cases, where the cost of capital may be lower to the client, we may broker a Hard/Private money loan to another Hard/Private money lender within our network.  Some states require commercial lenders be licensed and, in those instances, we are.

What type of properties do you fund on?

Currently we lend on residential investment properties and “light” commercial, such as 1-4 unit properties, smaller apartment buildings, small retail shops or office buildings, small bars or restaurants where there is real estate, single family homes, and strip shopping centers.  We have relationships with other commercial lenders that handle larger projects, so feel free to contact us and we can refer you.

Are the loans fully amortizing?

No.  Most or our Hard/Private money deals require interest-only payments that usually “balloon” in 6-18 months, meaning the entire principal must be paid back at that time.

Do you lend on purchase price or appraised value?

We usually lend on appraised ARV (after-repaired-value).  Thus, if you purchase a property far under its ARV, we may be able to lend you 100% of the purchase price.  You will, however, usually have to pay closing costs.

Can I roll closing costs into the loan?

Sometimes we will allow you to roll points into the loan.  However, most other title and lender fees, or other closing costs, will have to be paid by you at closing.

WHAT IS THE DIFFERENCE BETWEEN A HARD MONEY LOAN AND A PRIVATE MONEY LOAN?

The lines blur more every day.  Historically a hard money loan was made by an institution funded by private investors and a private money loan was made by a private individual.   Since the creation of crowd funding, the distinction is no longer so clear.  The parameters for hard money and private money lending are basically the same.  Unless of course you are borrowing from family with no regard for general risks or underwriting standards.