Frequently Asked Questions
At FK Capital Fund, we have an assortment of loan programs and we have organized this Frequently Asked Questions section to account for each loan program and loan type. Please call or email for any specific questions that are not answered here.
How fast can you close?
We typically are waiting on the borrower and title. If they’re quick, we can close within a week or so. The appraisal, when required, takes the most time.
What is the largest loan you will be subordinate to?
We do not have a specified maximum, but a higher first trust deeds equates to more risk.
Will you do a 2nd trust deed behind a hard money first?
No, we will only be subordinate to institutional loans.
Will you do a 2nd when the first loan is late or in default?
Generally no, but we will consider it if everything makes sense and there is a good story.
Do you require appraisals?
A vast majority of the time, we require appraisals, but if it is warranted, we will consider a desk appraisal only which would be accompanied by a site inspection. Regardless, we carefully analyze the comparable properties in the surrounding areas to make a final determination on value for residential properties. For commercial properties, we determine an appropriate capitalization rate for the area and base the value on the capitalized net income of the property.
Will you go higher than 65% loan to value (LTV)?
If the deal makes sense, we will consider up to 70%, but there would need to be compensating factors such as high credit, high personal income, a repeat client, purchasing a property under market value and 70% would be for residential only.
Will you consider land loans?
We will not do a 2nd trust deed on land.
Do you have minimum credit score requirements?
We want to see a quality investor profile and strategy, but we don’t have specific credit requirements.
What are the lowest points that you charge?
Our average fee structure is around 2 pts, but we will consider lower when appropriate for the deal.
How fast can you close?
We generally quote 2-4 weeks, but can close faster if the borrower is proactive. The most time consuming part of the process is the budget/plan analysis (1 week) and the appraisal (1 week), which can happen simultaneously.
Will you consider a ground-up construction loan on a commercial property?
In select circumstances, we would consider it, but a majority of our construction loans are on residential properties.
Do you require appraisals?
A vast majority of the time, we require appraisals, but if it is warranted, we will consider a desk appraisal only which would be accompanied by a site inspection. Regardless, we carefully analyze the comparable properties in the surrounding areas to make a final determination on value for residential properties. We would require an appraisal for all commercial construction.
Will you go higher than 65% loan to value (LTV)?
If the deal makes sense, we will consider up to 70%, but there would need to be compensating factors such as high credit, high personal income, a repeat client, or additional property to collateralize.
How does the draw process work and how long does it take?
Borrower submits a draw including the specific line-items, the invoices, and the lien releases. Within a couple days, an inspection is obtained. Immediately upon receipt of the draw, we adjust as necessary, and process the draw. This process typically takes 2-4 days.
Do you have minimum credit score requirements?
We want to see a quality investor profile and strategy, but we don’t have specific credit requirements.
What are the lowest points that you charge?
We charge approximately 2 points for all construction loans, less by exception.
Do you charge Dutch interest?
We only charge interest on the amount of money drawn.
Will you consider outside of California?
At this time, we are only lending in California.
Do I have to bring money into the deal to close?
Yes. We require some money to be brought into every transaction. Though we will go to a very high loan to value, above 100% of the purchase price at times, there will always be money required to close.
How do you determine the money required to close?
Our formula relates to the Total Deal and the After Repair Value. We will lend up to 65% of the After Repair Value and require a minimum of 15% of the Total Deal to be brought into the transaction. The Total Deal refers to the Purchase Price + Fees + Interest Reserve + Rehab costs.
What is After Repair Value or ARV?
ARV is the estimated value of a property after the rehab is done.
Will you joint venture on a deal?
We will consider it, but we don’t have a specific guideline. If the company or one of the partners, or other associates would like to joint venture, we will offer terms, but we would prefer to do the loan.
Can we do the rehab using credit and not bring in the rehab dollars?
No. The rehab dollars will need to be brought into escrow. You can do it on credit and get the money refunded later though.
Is the interest reserve required?
We require a minimum interest reserve of 3 months.
Do you have minimum credit score requirements?
We do not have a minimum credit score, but we will not be quite as aggressive with a lower credit score.
How fast can you close?
We typically are waiting on the borrower and title. If they’re quick, we can close within a week or so. The appraisal, when required, takes the most time. With a complete file, we can close in a day or so.
Do you require appraisals?
A vast majority of the time, we require appraisals, but if it is warranted, we will consider a desk appraisal only which would be accompanied by a site inspection. Regardless, we carefully analyze the comparable properties in the surrounding areas to make a final determination on value for residential properties. For commercial properties, we determine an appropriate capitalization rate for the area and base the value on the capitalized net income of the property.
Will you go higher than 65% loan to value (LTV)?
If the deal makes sense, we will consider up to 70%, but there would need to be compensating factors such as high credit, high personal income, a repeat client, purchasing a property under market value and 70% would be for residential only.
Will you consider land loans?
We will consider land loans, generally up to 50% loan to value.
Do you have minimum credit score requirements?
We want to see a quality investor profile and strategy, but we don’t have specific credit requirements.
What are the lowest points that you charge?
Our average fee structure is somewhere between 1 and 2 points, but we also can offer par pricing.
General Frequently Asked Questions
Q1: What types of loans does FK Capital Fund offer?
FK Capital Fund offers bridge loans, ground‑up construction financing and second trust deed loans for residential, commercial and land collateral. All loans are for business purposes and secured by California real estate.
Q2: Do you lend on owner‑occupied properties?
We are able to provide business‑purpose loans secured by owner‑occupied properties. We do not originate consumer or owner‑occupied mortgages.
Q3: What is the minimum loan amount?
The minimum loan amount is $100,000, lower by exception.
Q4: How quickly can a loan close?
With a complete submission package—including appraisal, photos and documents—some bridge loans can close in as little as three days. Construction and more complex deals generally take 2–4 weeks.
Q5: What documentation is required to submit a deal?
Initial submissions typically require an online form or application, property photos or MLS link, purchase agreement (if applicable) and a credit report. Additional items such as budgets, plans, bank statements and entity documents may be required for closing. See our Submission Requirements here.
Q6: What are your maximum LTV and LTC ratios?
Standard bridge loans and second trust deeds are capped at about 70 % loan‑to‑value. For construction loans, we go to 75% LTC on ground up construction and 85% LTC on rehab loans, but not exceed 65 % of the after‑repair value.
Q7: Do you lend outside California?
No. FK Capital Fund lends exclusively on properties located in California.
Q8: Are your loans personally guaranteed?
Personal guarantees may be required depending on the borrower’s experience, collateral type and deal structure. Each scenario is evaluated individually.
Q9: How are interest rates determined?
Rates vary by product, leverage and borrower profile. Typical note rates start around 8.99 % for first trust deeds and 10.99 % for second trust deeds. Lower rates may be available for well‑qualified borrowers.
Q10: Can I invest in trust deeds through my IRA?
Yes. FK Capital Fund’s trust deed investments are approved for self‑directed IRAs and other retirement accounts.