Source Capital

About Source Capital

Source Capital is an asset-based lender headquartered in Los Angeles, CA offering loans in California, Arizona, and Minnesota. They provide loans for a variety of situations and needs, including bridge loans, fix-and-flip loans, hard money refinancing, and loans for rental properties. They provide terms up to 3 years, loans with a maximum LTV of 70%, and rates starting at 7.99% . They lend money to all borrowers based on the property value and not on a minimum credit score. They will make loans on most types of properties, including single family residences, multi-family, apartment buildings, office units, retail spaces, hotels, storage buildings, senior housing communities, mixed use, warehouse buildings, industrial buildings, and medical buildings.

Loan Types Offered: Investment Property Loans, Fix and Flip Loans, Refinance / Cash Out Loans, Bridge Loans

Property Types Covered: Single Family, Multi Family, Apartment, Office, Retail, Hotel, Storage, Assisted Living, Mixed Use, Warehouse, Industrial, Medical

Areas Served: CA, AZ, MN

Licenses: MB#0926301, CA BRE# 01796521, NMLS# 237332

Lending Guidelines for Source Capital

Below are the general loan guidelines published on the Source Capital 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 Source Capital.

Loan Example 1

Martha finds a house in Los Angeles, CA to flip and resell. Since she doesn't have enough cash to acquire the $160,000 house outright, she decides to take out a hard money loan from Source Capital. Because the lender sets a 70% loan-to-value, Martha will be required to put 30% down and the total amount of the loan will be $112,000. The interest rate on the loan is 13% for a length of 6 months and the lender requires a three point origination fee at the closing. The interest payments are to be paid monthly and the principle will be repaid after the sale of the property.

By the parameters of the loan, Martha will have to pay a $3,360 origination fee plus 30% of the purchase price, or $48,000, based on the 70% LTV. After the deal is closed and Martha takes over the project, she will need to begin making payments each month of $1,213 to Source Capital ($112,000 principle x 13% / 12 months). At the expiration of the loan, she sells the renovated property for $200,000. After deducting the $7,280 in interest expenses ($1,213 times 6 months), the $3,360 origination fee, the $112,000 principle amount on the loan, and the $48,000 she brought to closing, she will earn a gross profit of $29,360 ($200,000 price minus $170,640 in total costs). This amount would then be reduced by any renovation costs paid by the borrow.

Loan Example 2

Guy takes out a loan from Source Capital in order to remodel a townhome to re-sell in Los Angeles, CA. The loan has the following terms:

a) A $150,000 sales price, b) a 55% loan-to-value (LTV), c) a 6 month term, d) a 12% interest rate, and e) a 4% origination fee.

Based on a $225,000 sales price at the end of the 6 month term, the outcome for the deal would look like the following:

$225,000 sales price
- $82,500 principle (55% LTV)
- $67,500 down payment (45% on 55% LTV)
- $3,300 origination fee (4% of the $82,500 principle)
- $4,950 total interest paid (6 months x 12% interest)
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= $66,750 gross profit (doesn't include taxes or rehab costs)

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