ASSIGNMENT:

This was a cash out refinance of an apartment building that was mostly vacant and in need of major renovations. The cash out was to be used to cover the costs of a complete building renovation which included a new roof, new windows, adding mini-split AC units, exterior painting and landscaping. Because the building was mostly vacant, obtaining bank financing was not an option.

CHALLENGE:

We needed a high LTV on this transaction. The borrowers were light on reserves and their current credit scores were low but we knew that they would be increasing in the next few months because we had recently helped them on a different cashout refinance whereby multiple trade lines were paid off to zero balances.

SOLUTION:

We structured a bridge loan and by cross collateralizing against another rental SFR we were able to achieve the LTV required to make this feasible.  We paid off the current 1st trust deed, set money aside for the rehab work and borrower walked away with some funds. Our borrower hired a contractor for the complete project renovation. Through a controlled draw request, we were able to protect the borrower's funds by paying for contractors' work as phases of the project were completed.  We will be working closely with the borrower during this process as we get ready to take this loan out with permanent financing once the units are renovated and leased out.  At ALB we understand the importance of teamwork. We work closely with everyone involved in a transaction.