Distressed Property

Hard Money Loans for Distressed Property

For buyers or investors that purchase and renovate distressed property, Socotra Capital offers clients various programs to leverage their capital or current real estate holdings. A distressed property offers tremendous opportunities for buyers and investors alike. When a bank or lender repossesses a property, it generally wants to unload it fast to recoup its financial expenditure. It will make every attempt to sell it on the open market as expediently and expeditiously as possible, first at auction, and if there is no buyer, then to the general public.

We can often provide you same-day prequalification on a hard money loan for distressed property. Please complete our Loan Interest Short Form to get started on a hard money loan for a distressed property.

A distressed property is often outdated or in poor physical condition due to the owner’s precarious financial situation and inability to provide ongoing maintenance on the property. When deciding on a distressed property to bid or make an offer on, you should try to inspect the property as thoroughly as possible and, ideally, bring a trusted building contractor to get an estimate of repair costs. Knowledge of the property and awareness of the total costs will factor in greatly when determining your bid or offer.That knowledge will also guide non-auction purchases by providing measures for negotiating the purchase price.

Please review a sampling of Deals Funded on distressed property to see our past performance.

Socotra Capital Offers Hard Money Loans on Distressed Property

Socotra Capital offers both interest-only and term loans on distressed property, allowing you to choose a payment schedule that best fits your needs. Buyers interested in a hard money loan on a distressed property they wish to rehab and resell quickly will benefit from our “Fix and Flip” hard money program with a term of 6-12 months in most instances.

Those interested in hard money loans for income-earning or rental properties should consider a Buy and Hold loan with a term up to 7 years. Keep in mind that when buying at auction, the buyer is required to pay for the property immediately at the auction; in this case the buyer obtains a Cash Out loan from Socotra Capital following acquisition of the property. In any case, Socotra Capital provides funding for up to 75 percent of the purchase price, and, if applicable, 75 percent of the rehab costs for a distressed property, for a term as long as 7 years.

Download and complete the Socotra Capital Form to get started on a hard money loan for distressed property.

Be Prepared by Pre-Qualifying for a Hard Money Loan for Distressed Property Purchases

There is a lot of competition for distressed property and they usually sell very quickly because of their reduced prices. As an experienced, direct lender, Socotra Capital reacts promptly and ensures that you can take advantage of those special opportunities as they arise, and not be delayed by funding challenges. The quicker you see them and can make an offer promising a quick close, the more likely you are to have your offer accepted. Along those lines, it helps to be prequalified with Socotra Capital. You can start by either filling out the Short or Long Form Application online, or you can contact a sales representative at (916) 617 – 2220. We will go over the process with you and answer any of your questions.


Loan Parameters

  • 30% cash into the transaction (if there is a seller carry on the land, the borrower will still need to come in with 20% cash)
  • 60% LTV for 12 month note
  • Extensive rehab experience and/or new home building. No first timers.
  • Cash reserves of 10% on the cost of construction
  • Cost based on the following formula = land cost + soft costs (architect, permits) + hard construction costs (must include 10% contingency) + 9 months pre-paid interest (see sample spreadsheet on server: Business Dev: Forms Templates: Construction: New Construction Sales Info)

Get started on your loan today!

Download and complete the Socotra Capital Form to get started.

Call (916) 617.2220 or email us any time.