There is no typical loan but some examples of the types of loans we will consider are as follows: Construction Loans: Typical loans include lending to allow a contractor to complete construction of two spec homes totaling 2,500 square feet each after which the contractor sells the homes for a profit and repays our loan. Or another situation would be where the builder needs money to complete a home and refinance with a conventional residential lender.
Cash to Buy Property at a Foreclosure Auction: Other type of loans help contractors buy properties at foreclosure auctions, fix up the properties and then refinance with a local bank. In one situation a Borrower was lent $250,000 to purchase a parcel of land and then went on to subdivide the land, sell off the parcels and repay the loan. Two parcels were kept aside and one was later sold and the other built upon by the same Borrower.
"Fixer-Uppers": A contractor needed money to purchase a home that needed "work". The property was undervalued due to its condition but would be worth quite a bit more when restored. After funding the contractor fixed up the property and sold it for the higher true value.
Mortgage Purchase: A Borrower came across an opportunity to buy a loan from a bank that had gone into foreclosure and did so, the property involved was split into lots and sold over time making a profit for the Borrower and allowing the Borrowerer to pay off the loan.