Address: Orlando, FL 32835
ARV: $5,000,000 (As-is)
Purchase Price: $2,700,000
Loan Amount: $1,620,000
Loan Structure: 12 Months Interest Only
Interest Rate: 13%
LTV 60%
Borrower Profile: Business Owner
Work Description: Commercial Building
Loan Purpose: Purchase – Office Building
May 03, 2024
We recently helped a local Mortgage Broker/Insurance Agency purchase the building they have occupied for a while. We are familiar with the broker as we had already closed two deals with them in the previous year. They decided to buy the place they were renting once they heard it would be a great deal, and the seller’s heirs did not wish to take over the property. The appraised valuation of the property, with all tenants, was $5,000,000, and they could purchase it for $2,700,000.
Before signing the deal, they wanted to confirm their financing options. They called us and asked for 100% financing for the 20,000 sq office building they partially occupy. We explained that it was impossible and offered the terms we could offer. They informed us they had found a mortgage broker who was getting them 100% financing. We conducted some research on the lender and discovered that they were collaborating with another broker. We wished them good luck.
A few weeks later, they called us back and informed us that we were right—the broker could not get them the 100% financing they had promised. They asked if we could offer them the previous terms we had suggested, which we did. It was a 60% LTV 1st mortgage for $1,620,000 with a 13% Interest-Only rate and a 6-month Pre-Payment Penalty. We closed the loan within the contract timeframe, in just ten days.
Their exit strategy is to refinance into a more favorable long-term mortgage loan.
