We excel at developing tailored solutions for our borrowers. Here are just a few ways we can work with our clients to help them realize their goals.
A customer’s San Clemente project was expected to take 5-6 months, but city permitting delays extended the holding period to 18 months, significantly increasing holding costs. Prior to funding this project, the after-repair value was estimated at $1,100,000, with a much lower rehab estimate of $50,000. Following the “70% rule” math, this acquisition was closer to 79%, leaving only a 21% reserve margin to cover holding costs, selling costs and profits. To combat the increased holding costs, the investor was able to boost his reserve margin to 24%, by planning a more extensive rehab ($121,000) bringing his finished product in line with the $1,250,000 sales comps in the area. We were able to provide a loan at a requested 82% of the purchase price, allowing him to increase his return on cash from 31% to 53%.
One long-time borrower was looking to finance two multi-family purchases for $7.5M and $5.8M, both at the same time. The borrower did not have the typical 20% down, and was going to be forced to walk away from one of the transactions, costing hundreds of thousands of dollars in earnest money in the event we could not provide a higher LTP. We worked hard to meet the borrower’s needs, and based on their profile and book of business, we were able to secure a 90% LTP for both properties. This provided the necessary funding, and allowed the borrower to close both together on the same day.
We were providing a cash-out refinance on a 10 unit MFR worth around $2.8 million. Because of the unusual complexity of the project, we needed a full appraisal, but the appraiser chose comps miles away and only used ½ the actual monthly income, so the appraisal came in at only $1.8mm. This put the entire deal in jeopardy and caused the borrower to place a number of frantic calls to our office. Out of the gate we questioned the appraisal estimate, in part because the sister building (directly across the street) sold 2 years ago for $2.5 million. So we called the appraiser and explained the situation. We also provided the actual income figures as well as what we thought were better comps and asked for another, expedited review. The adjusted appraisal came back at $2.475 million, which was enough to allow the borrower to close the loan.
Seller had a property worth $565,000 under contract with a buyer, who ended up canceling the transaction at the last minute. Our client stepped forward and made an offer that they accepted, on the contingency that the buyer close within 5 days. The seller was very adamant about the timeline and was hypersensitive to any funding outside of an all cash offer, fearing another failed transaction. We were able to close in the amount of time requested as well as interface with the seller’s agent to reassure them that our client and our process both had solid track records. The deal funded on time with no hitches, causing the seller to comment that “he couldn’t believe a lender could put together a deal that quickly.”