Commercial Mortgage Broker Financial Compound arrange this 65% of all-in-cost land acquisition and entitlement loan for a 7 acre infill residential site in Southern California. A tentative tract map is expected within four months of loan closing that would allow for 150 town homes. In addition to the land purchase, the financing provides funds for entitlement, interest reserve, and closing costs.
By the time the borrower determined his desired financial structure, there were only three weeks left on the purchase contract. The seller had previously indicated an extension would be forthcoming if necessary, but in the end did not grant it. This commercial mortgage broker found a lender able to close land loans within three weeks and that lender found an appraiser also willing to work within our timeframe. Other loan terms included an interest rate of Prime plus 1%, 2 year loan term, 1% lender fee.
The borrower originally asked the commercial mortgage broker to seek an equity partner or high leveraged financing and Financial Compoud was able to find not only an equity partner, but also a second mortgage lender willing to lend up to 95% of the total capitalization for an approximate 18% interest rate and 3% fee. In the end, the borrower chose to use this deal for a 1031 exchange and opted wanted the lower leveraged senior debt.
Commercial Mortgage Broker Financial Compound was able to present alternative financing options at various levels of the capital stack to help the borrower determine its best courst of action relative to the financing of this commercial real estate asset.