Rainbow Funding and Real Estate

About Rainbow Funding and Real Estate

Rainbow Funding and Real Estate is a Newark, CA based private lender offering loans in the Bay Area. Their lending focus is primarily on rental property loans. The focus of their lending is on single family units.

Loan Types Offered: Investment Property Loans, Refinance / Cash Out Loans

Property Types Covered: Single Family, Multi Family, Warehouse, Industrial, Church

Areas Served: Yolo, San Francisco County, Marin County, Alameda County, San Mateo County, Sonoma County, Napa County, Santa Clara County, Contra Costa County, Solano County, San Joaquin County, Sacramento County

Lending Guidelines for Rainbow Funding and Real Estate

Below are the general loan guidelines published on the Rainbow Funding and Real Estate 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 Rainbow Funding and Real Estate.

Loan Example 1

Clara finds a condo in Yolo, CA to rehab and resell. Since she does not have enough cash on-hand to acquire the $230,000 project outright, she takes out a hard money loan from Rainbow Funding and Real Estate. The lender agrees to make a loan with a 70% loan-to-value (LTV) so they will loan $161,000 on the house. The rate on the note is 11% for a length of 6 months and the lender requires a five point origination fee at closing. The interest is to be paid on a monthly basis and the principle amount will be paid back after the property sells.

Clara must fund a total of $32,400 upon closing to pay the $69,000 down payment plus the $8,050 origination fee. After the deal is closed and Clara takes on the project, she will have to begin making payments each month of $1,476 to Rainbow Funding and Real Estate ($161,000 principle x 11% / 12 months). At the expiration of the loan, she sells the rehabed house for $287,500. After deducting the $8,855 in interest payments ($1,476 times 6 months), the $8,050 origination fee, the $161,000 principle amount on the loan, and the $69,000 she brought to closing, she will earn a gross profit of $40,595 ($287,500 price minus $246,905 in total costs). This amount would be reduced by any building costs paid out of pocket.

Loan Example 2

Miranda is a real estate investor in Yolo, CA. She purchases a run-down house for a rehab project and takes out a hard money loan from Rainbow Funding and Real Estate with the following features:

$180,000 sales price
85% loan to value (LTV)
18 month term
10% rate of interest
1% origination fee

Assuming a $234,000 sales price after the 18 month term, the numbers for this project would look like this:

$234,000 sales price
- $153,000 note principle (85% LTV)
- $27,000 cash paid at closing (15% on 85% LTV)
- $1,530 origination points (1% of the $153,000 principle amount)
- $22,950 interest payments (18 months x 10% interest)
-----------------------
= $29,520 gross profit (doesn't include taxes or renovation costs)