High leverage land acquisition loan for a retail site in Arizona
Financial Compound arranged a $1,432,000 land acquisition loan for 3.3 acres in Arizona. The borrower intends to complete the entitlement process with the city and build a 20,330 square foot retail center on the site. The purchase price for the land was $1.35 million. The borrower projected $400,000 of entitlement costs making the loan 82% of total cost or 106% of purchase price. The borrower was given credit toward his equity contribution requirement for expenditures that occurred prior to loan closing. Financial Compound facilitated changes to the lender’s boilerplate loan documents despite their stated policy against making any changes to their documents.
The loan terms included an interest rate of Prime plus 1%, for one year interest only.
See also: Land Loans