First Equity Funding

About First Equity Funding

First Equity Funding is hard money lender based in Sea Grit, NJ. They provide loans throughout New Jersey, New York, and Pennsylvania. They offer construction loans and fix-and-flip hard money loans. Their lending guidelines are versatile, including rates ranging between 10% and 13%, loans with a maximum LTV of 65%, and terms between 9 months and 12 months. They primarily offer loans for single family units and multi family.

Loan Types Offered: Fix and Flip Loans, New Construction Loans

Property Types Covered: Single Family, Multi Family

Areas Served: NJ, NY, PA

Lending Guidelines for First Equity Funding

Below are the general loan guidelines published on the First Equity Funding website. Please confirm all terms and rates directly with the lender.

Loan Examples

The following loans are for education purposes only. They do not represent actual loans executed by First Equity Funding.

Loan Example 1

Brenda takes a fix and flip loan from First Equity Funding in order to remodel a property to flip in Brooklyn, NY. The sales price of the property is $260,000. The loan to value (LTV) on the note is 55%. This means Brenda will bring 45% of the sales price to closing and the principle will be $143,000 on the deal. The terms of the deal dictate a 9% note for 18 months. They also require a 1 point origination fee, which will also have to be paid when the property closes.

By the parameters of the note, Brenda will be required to contribute a $1,430 origination fee in addition to 45% of the sales price, or $117,000, based on the 55% LTV. Once the deal is executed and Brenda takes the property, she will begin making payments each month of $1,073 to the lender ($143,000 principle x 9% / 12 months). At the end of the note, she sells the rehabed property for $364,000. After subtracting the $19,305 in interest expenses ($1,073 times 18 months), the $1,430 origination fee, the $143,000 principle on the note, and the $117,000 she brought to closing, she will earn a gross profit of $83,265 ($364,000 sales price minus $280,735 in costs). This amount would then be reduced by any renovation costs paid out of pocket.

Loan Example 2

Terrance finds a duplex in Brooklyn, NY to renovate and resell. Since he does not have enough cash to buy the property outright, he takes a fix and flip loan from First Equity Funding with the following parameters:

$190,000 sales price
55% loan-to-value (LTV)
18 month term
13% interest rate
3% origination fee

Based on a $266,000 sales price after the 18 month term, the final numbers for this deal would look like this:

$266,000 sales price
- $104,500 principle on note (55% LTV)
- $85,500 cash paid at closing (45% on 55% LTV)
- $3,135 origination points (3% of the $104,500 principle amount)
- $20,378 interest payments (18 months x 13% interest)
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= $52,488 gross profit (doesn't include taxes or rehab costs)