Residential Rehab Funding

Overview: Residential Rehab Funding

IMPORTANT: Aegis RE Partners is a provider of equity capital, and is not a lender or licensed mortgage banker. Aegis will not provide  funding for any transactions where it suspects fraud or misrepresentation of any kind against Aegis, the seller, or the seller's lender. The following are frequently asked questions (FAQ) regarding our rehab funding program:

Q: What sets Aegis apart from other rehab funders?

A: There are two key differences between the Aegis program and what is most commonly offered by rehab funders:

1. Aegis makes a preferred equity investment in the property as opposed to a loan. As such, Aegis does not require a personal guarantee (other than for fraud and misrepresentation), nor do we base our decisions on personal credit scores.
2. Along with our first deed of trust lender partner, Aegis provides 100% financing for the acquisition and rehab of residential properties purchased for investment purposes.

Q: How does Aegis make money? What percentage of the profit is allocated to Aegis?

A: As a provider of preferred equity, Aegis is entitled to a preferred return on the capital invested in each transaction. To achieve our targeted IRR for this investment strategy, we receive a 12% preferred rate of return, along with a split of the profits based upon a number of factors, including experience, amount of cash contributed by the Client, length of holding period (i.e., how long our capital is outstanding), and size of transaction. Each deal is priced on a case-by-case basis.

Q: In addition to the profit allocation, are there any other costs associated with each transaction?

A: Since we fund transactions based upon the merits of each deal, it is imperative that we perform the necessary due diligence on each transaction (e.g., valuation, market analysis, title history, etc.). To cover the costs associated with this due diligence, the Client pays $600 to Aegis, which is used to pay for the appraisal and property inspection. In addition to this due diligence fee, the Client is responsible for the property insurance, which must be for a minimum of six months, paid in full at, or prior to closing.

Q: Does Aegis perform a credit check?

A: Yes, we do run credit checks; however, credit score is not a factor in our decision process. Additionally, as part of our standard due diligence, we will run a full background check - including criminal - on each principal of the company. Aegis is not a lender and, therefore, does not qualify the transaction based upon the Client’s ability to repay the invested capital.

Q: What information does Aegis require in order to begin underwriting a new transaction?

A: In order for us to begin the underwriting process, we must have all of the following information:

1. Aegis Application Form (found on the Submit Application page)
2. Aegis Rehab Funding Transaction Worksheet (found on the Submit Application page)
3. Copy of Drivers License
4. Articles of Incorporation/Organization
5. Bylaws/Operating Agreement
6. Evidence that Corporation is in Good Standing (as of transaction date)
7. Resumes of all Principals and/or Authorized Signers
8. Brief Narrative Describing Business Plan
9. Fully Executed Purchase Contract (with all Addendums if applicable)
10. Detailed Rehab Budget  
11. Contract with licensed and insured contractor performing rehab 
12. Comparative Market Analysis (CMA) with at least three (3) recent comparable sales
13. Proof of contractor's insurance: General Liability, Worker's Comp and Builder's Risk 
14. Interior and exterior photos of subject property 
15. Last three months' bank statements for business
16. Contact info for realtor who will be listing the property subsequent to rehab being completed
17. Aegis Due Diligence Fee
18. Other documents as needed

Q: How long does Aegis take to underwrite, approve and fund a transaction?

A: Typically, our underwriting process can be completed within 14-21 business days from the time we receive all of the information listed above. Since an appraisal and inspection report is required, the total time it takes for an approval and closing could vary depending on how long it takes to receive these reports. Please keep this timing in mind when structuring your transactions, as we will very rarely make exceptions to this policy.

Q: Can I choose the title and escrow company for the transaction?

A: Yes, but we must first approve the companies you would like to use. Aegis has approved a number of title/escrow companies in CA, AZ, and NV, so please feel free to use on of these preferred vendors. A list of these service providers can be found on the Aegis Partners page of this site.

Q: How does Aegis protect its investment?

A: As noted above, we are providing equity, not debt. Accordingly, all of our invested capital is at risk without recourse back to our Clients (except for instances where fraud and/or misrepresentation has occurred). However, lack of personal guarantee and promissory note notwithstanding, we are able to mitigate risk and protect our investment through: (i) extensive transaction-level due diligence; (ii) execution of a Deed between Aegis, as Grantee, and our Client, as Grantor, which is held in escrow; (iii) filing of a Memorandum of Understanding, Mortgage, and/or Performance Deed of Trust; (iv) title insurance policy and closing protection letter provided by title insurance company; and (v) working only with trusted third party providers (e.g., title/escrow companies, mortgage lenders, appraisers, etc.).

Q: How do I get started with Aegis?

A: To be added to our “prospect” database, which we encourage you to do prior to having a deal to submit, please complete the Investor Information Package and return, via email, to application@aegisrepartners.com. This will help in expediting the process once you have a transaction in need of funding. Please note, we don’t “pre-approve” Clients, as our decision to invest is based primarily on the transaction. However, if you have any liens, judgments, or pending lawsuits against you or the company in which you be taking title to the property, we may need additional documentation prior to approving you. We will not approve any applications where the applicant has been convicted of any crimes of moral turpitude.