options for private money bridge loan or 2nd (current LTV 35%)

[Spencer Foosherian]

Currently looking to get advice on a $50-60k private money bridge loan for my parents. 

Scenario: first mortgage $450k, property value $1.5MM - LTV 35%. Location - Santa Barbara county, CA. - current mortgage payment $4500

My retired parents are preparing to sell their house and rent for 1-3yrs while looking for a few smaller properties to buy. They are on a fixed income and will not qualify for traditional lending (as far as I know). They need around $50K bridge loan to facilitate a move into a rental/living expenses while we renovate their current home and then sell (4-6 month plan).  Credit score 670 - 1 random late payment to PayPal during Oct 2021, aside from that, they have little debt 1-3 credit cards carry a balance - utilization at 50%.  

Value of property as is - $1.5MM based on very recent comps in the immediate vicinity.  Value after renovation will likely reach $2-2.2MM based on very recent comps in the neighborhood.

I am not sure what their options are but seems like there should be some opportunity for an investor to earn 10-15% return on a short term loan. Does 10-20% seem too high? low? for the risk involved 

Renovations will be paid for by an outside investor and profits above the pre-renovation price will be split amongst the stakeholders in the project (i.e. parents, investors and project managers).

any advice or insight is appreciated

[Joe Homs]

@Spencer Foosherian the question I would be asking is what is the capital gains tax for your parents?  They can exclude $500K under 121, but anything over that they will need to pay taxes on.  Get this question answered before you move on.  

As for your question, this should not be difficult to accomplish.  Have your outside investor come up with the money for them.  It sounds like they are getting a sweetheart deal...

Good Investing...

[Issac San Miguel]

the problem may be the credit score. cash outs are becoming more heavily scrutinized as of late. 

you may have to find true private money. im curious why the investor doesnt do the whole thing? 

[Chris Seveney]

@Spencer Foosherian

We

Would consider private lending on a deal like that