Deal snapshot
| Location | Petworth, Washington, DC |
| Property type | 1922 Petworth rowhome (two-unit after CO) |
| Loan type | Hard money bridge → DC DSCR hold |
| Loan amount | $550,000 bridge (88% LTC) |
| Close time | 11 business days |
Investor challenge
12-day estate timeline on a Petworth rowhome with unpermitted English basement, open DOB violations, and TOPA exposure. Conventional lenders would not fund until compliance cure — sponsor needed 88% LTC bridge with draws tied to DOB sign-offs, not cosmetic photos alone.
Jaken Finance Group’s solution
88% LTC at 11.25% IO with 14-month term and milestone draws aligned to TOPA clearance, basement CO path, and Historic Preservation facade approval. Compliance spend (~$48,500) was modeled before cosmetic ARV.
Outcome
Flip at $925K ARV would have netted ~$9K after carry — sponsor executed Plan B: legal two-unit at $4,800/mo gross, DSCR refi at 68% LTV for long-term hold with RLTO-modeled expenses.
DC hub: investment property financing Washington DC · DSCR Washington DC
Acquisition
Purchase: $625,000 · Day 11 close
Hard money: 88% LTC · 11.25% IO · 14-month term
Compliance spend
| Item | Cost |
|---|---|
| TOPA counsel | $4,500 |
| DOB violations | $18,200 |
| Basement CO path | $22,000 |
| HP facade consultant | $3,800 |
Hold exit (executed)
- Gross rent: $4,800/mo (legal two-unit)
- Appraisal: $895,000
- DSCR refi: 68% LTV → $608,600 @ 8.45%
Why Plan B (hold) beat the flip in DC
This deal is a lesson in regulatory carry. A Petworth rowhome with an unpermitted English basement, open DOB violations, and TOPA exposure can’t be flipped on a cosmetic timeline — the value is locked behind compliance. The bridge was built for that reality: an unusually long 14-month term with draws tied to DOB sign-offs, the basement CO path, and Historic Preservation facade approval, not just before/after photos. Without that calendar, the ~$48,500 compliance spend would have forced a distressed sale.
When the work was done, the exit math chose itself. A flip at $925K ARV netted only ~$9K after carry and DC’s heavy transaction friction. The legal two-unit configuration rented at $4,800/mo, which supported a DSCR refi at a conservative 68% LTV — converting a marginal flip into a long-term hold with equity and cash flow, expenses modeled to RLTO.
Takeaway for DC investors: price TOPA, DOB, and HP into carry before you offer, and keep the hold exit live — in high-friction markets the rental often beats the resale.
Deal timeline
| Week | Milestone |
|---|---|
| 1 | LOI — row condition and occupancy status verified |
| 2 | Hard money close on DC row conversion thesis |
| 3–9 | Structural and systems draws — rental certificate path |
| 10 | Lease-up — market rent aligned with Petworth Metro walk |
| 11–13 | DSCR appraisal and refi package assembled |
| 14 | Permanent DSCR close — equity recycled |
DC-specific diligence
- Rent control / TOPA scope checked — exempt stock confirmed with counsel
- Rental Business License timeline included in hold budget
- Row-party wall scope separated from unit interior in draw schedule
- Metro proximity documented for appraiser — Petworth premium supported
Sponsor takeaway
DC row deals fail when sponsors under-budget compliance carry. Model RBL, TOPA, and inspection sequencing before IO term selection. Compare: DSCR loans Washington DC · Petworth DSCR.
Full economics — flip vs hold
| Line | Flip (not executed) | Hold (executed) |
|---|---|---|
| All-in basis | $740,000 | $740,000 |
| Exit value | $925,000 ARV | $895,000 appraised |
| Sale costs + transfer (8%) | −$74,000 | $0 |
| IO carry (14 mo @ 11.25%) | −$116,000 | −$116,000 |
| Net before debt paydown | ~$9,000 | N/A |
| DSCR refi proceeds | — | $608,600 @ 68% LTV |
| Gross rent | — | $4,800/mo |
| Ongoing asset | $0 | Two-unit cash flow |
Petworth market context
Petworth rowhomes trade on Metro walk time — blocks within 0.4 miles of Georgia Ave-Petworth command $40K–$80K over interior Petworth comps. English basement legalization is common value-add but requires DOB + HP sequencing — budget $20K–$35K and 4–8 months before rent-ready. TOPA notice is non-optional on tenant-occupied acquisition — counsel $4K–$6K line standard.
Compliance timeline detail
| Phase | Duration | Spend |
|---|---|---|
| TOPA notice + counsel | 45 days | $4,500 |
| DOB violation cure | 60 days | $18,200 |
| Basement CO path | 90 days | $22,000 |
| HP facade approval | 30 days | $3,800 |
| Total compliance | ~7 months | ~$48,500 |
Hard money 14-month term was sized to this compliance stack — a 9-month bridge would have forced extension fees or distressed sale.
Petworth DC Funded Rowhome Hard Money Case Study: replay checklist
Case studies illustrate one closed file — not a guarantee of future terms. Before you mirror the structure:
| Step | Action |
|---|---|
| Comps | Three solds within 0.5 mi on matching bed/bath and product type |
| Carry | Model 8.99%–13.5% IO bridge and 5.75%–10.5% DSCR exit with investor tax and insurance |
| Entity | LLC vesting, operating agreement, and EIN aligned before appraisal |
| Exit | Written takeout path — DSCR refi, sale, or wholesale — before increasing rehab scope |
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