KB Capital is private lender headquartered in El Paso, TX. They offer funding throughout El Paso. Their lending focus is mainly on fix and flip hard money loans. They offer terms between 6 months and 120 months, loans with a maximum LTV of 70%, and rates ranging between 7.99% and 12.99%. They offer loans on all of the following types of properties: single family homes, multi-family units, apartments, office units, retail units, and mixed use spaces.
Below are the general loan guidelines published on the KB Capital website. Please confirm all terms and rates directly with the lender.
The following loans are for education purposes only. They do not represent actual loans executed by KB Capital.
Morris finds a townhome in El Paso, TX to remodel and resell. Since he doesn't have enough cash available to acquire the $270,000 property outright, he decides to take out a private money loan from KB Capital. The loan to value (LTV) on the deal is 65%. This means Morris will need to bring 35% of the sales price to the closing and the principle amount will be $175,500 on the deal. The interest rate on the loan is 14% for a term of 18 months and the lender requires a one point origination fee at the close. The interest payments are to be paid on a monthly basis and the principle will be returned after the property sells.
Therefore, the borrower will have to contribute a $94,500 down payment plus pay a $1,755 origination fee. After the deal is closed and Morris takes over the property, he will need to begin making payments each month of $2,048 to the lender ($175,500 principle x 14% / 12 months). At the expiration of the note, he sells the rehabed house for $324,000. After subtracting the $36,855 in interest expenses ($2,048 multiplied times 18 months), the $1,755 origination fee, the $175,500 principle amount on the note, and the $94,500 he brought to the closing, he will earn a gross profit of $15,390 ($324,000 price minus $308,610 in total costs). This amount would then be reduced by any building costs paid by the borrow.