Our Loan Process
From light rehabs to heavy rehabs, newbies to very experienced; we offer all types of programs and customize based on the client’s needs.
Initial Contact and Deal Submission
When a borrower contacts MK Capital Funding Solutions, we ask that the borrower fills out a short application with the deal information and submit to us either on the portal or to one of our loan officers. We then assess whether the project meets our underwriting criteria. We ask for critical information including credit score, experience level, financial liquidity, and the deal analysis- including the current and ARV value of the project and rehab amount.
The borrower should include the following information in the deal submission: property address, purchase price, rehab budget, after repair value and exit strategy- purchase or rental. If a proof of funds is needed to help secure the acquisition of the property, we can assist with that as well.
We let the borrower know whether or not MK Capital can fund the loan. And if we can fund, then we move to the 2nd stage of our process, Underwriting.
Underwriting and Processing
Once the loan meets our preliminary underwriting criteria, we will ask the borrower to: 1) submit the purchase contract and 2) submit a written scope of work
Once we receive, we will order an appraiser to inspect and appraise the property. We will then ask for additional documents regarding the borrower’s credit, experience, liquidity (available cash/stocks). We will request property title history and property insurance. We will need to have the formation documents and EIN for the borrowing entity. We can close in an individual’s name if needed. All the paperwork must be received prior to the close. The faster we get documentation, the faster we can close.
Loan closing generally occurs at a lawyer’s office or title company office. At the close, there are typically two transactions that occur including the property purchase and the loan settlement. Our staff will have reviewed all the necessary documentation prior to the close so there will be minimal complexity or stress at the settlement table. Our borrowers will be required to sign a variety of loan related documents which will include a mortgage note, promissory note, personal guarantee, security agreement, investment affidavit and assignment of rents and leases. We will have already sent loan proceeds and specifics to the settlement agent, so after all the documents are signed and reviewed by the various parties to the loan, we will approve disbursement of loan proceeds.
On a rehab or new construction loan, the escrow is dispersed in stages. Each payment will be released to the borrower’s (entity) bank account after an inspector has completed a review of the work completed. Typically one draw per $10-25k depending on the size rehab. The inspector reviews the borrower’s proposed versus actual work completed. Generally, the period of time between initial draw request and money being wired is 5 business days.
When the borrower requests a payoff, we will work with the settlement agent to make the process as timely as possible. Please allow 2 weeks ahead of time. In the event that you pay off your loan prior to maturity, there is no prepayment penalty.