WestPac Lending's FAQ Page
Below is a consolidated list of all WestPac Lending’ Frequently Asked Questions (FAQs) we have throughout our website, as well as a few extra general questions have been answered. If you have any questions we haven’t covered, please feel free to call us or complete the contact form below. A single dedicated Loan Officer will reach out to you directly. We respect your privacy – your information is never sold to third parties, and you won’t receive calls from multiple loan officers.
Private Money Loan FAQs:
A private money loan is a short-term real estate loan funded by private capital rather than traditional banks, typically used for fast or non-traditional transactions.
Private money loans through WestPac Lending can often close significantly faster than conventional financing, depending on deal structure and valuation.
Most private money loans are business-purpose loans and commonly used by real estate investors, but eligibility depends on the transaction.
Private money loans focus more on the property and exit strategy than borrower income, making documentation requirements more flexible.
SBA Loan FAQs:
SBA loans require the business to occupy the property:
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- At least 51% for existing buildings
- At least 60% initially, increasing to 80% for new construction
Properties that do not meet owner-occupancy requirements generally do not qualify for SBA financing.
SBA 7(a) loans are flexible and can be used for real estate, business acquisitions, and working capital.
SBA 504 loans are designed specifically for fixed assets like commercial real estate and equipment and are structured with a bank, a CDC, and borrower equity.
A multifamily property is a residential building with 2 or more separate housing units under one ownership. Common examples include duplexes, triplexes, fourplexes, and apartment buildings with 5 or more units. Loan options and qualification requirements often differ based on the number of units.
Fix & Flip Loan FAQs:
It depends on the individual’s expertise and the market conditions. They can be worth it if the flipper can renovate and sell the property at a significant profit.
The 70% rule suggests that an investor should pay no more than 70% of the after-repair value (ARV) of a property, minus the repair costs. It is a guideline to help flippers avoid overpaying.
It varies greatly, depending on the property and location. Generally, one would need sufficient capital to purchase the property and cover repair costs, which can start from $70,000 to several hundred thousand dollars.
The average fix and flip project can take anywhere from 6 to 12 months, including the time it takes to purchase, renovate, and sell the property.
DSCR Loan FAQs:
The amount you can borrow on a DSCR loan depends on the DSCR ratio set by the lender, which involves your property’s net operating income. Typically, lenders look for a DSCR ratio greater than 1 to 1.25, allowing for a loan amount where the property’s income can cover the debt service with a buffer.
Not everyone can get a DSCR loan; eligibility typically depends on the property’s potential income, the borrower’s creditworthiness, and other financial criteria set by the lender. It’s primarily for real estate investors with good financial standing.
Down payment requirements for DSCR loans can vary widely depending on the lender’s policies and the specific circumstances of the loan. While it is common to see down payments of 20-25%, it is not a strict rule and could be more or less.
A good DSCR for real estate is generally 1.25 or higher. This indicates that the property is generating 1.25 times the annual debt service, providing a cushion in case of unexpected events or vacancies. It shows the lender that the borrower has a solid ability to repay the loan.
