Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $2,745,000
- Month: June
- Year: 2017
Professional real estate investors with experience in executing value-add business plans in the San Francisco Bay Area identified a conveniently located property that needed capital improvements to the exterior as well as interior renovations to effectively compete in the market. Due to the property’s overall condition and prior management, its rents lagged the submarket. Based on traditional lender underwriting, the requisite equity required to complete the acquisition would have resulted in diluted returns.
The clients are currently renovating other properties in the San Pablo area and this helped to estimate upside potential as well as the costs necessary to unlock the potential. The hard cost budget to improve the property totaled $589,000 with $350,000 devoted to renovating unit interiors. As the property did not have breakeven debt coverage going in, an interest reserve was established to fund shortfalls.
The Opus Bank (“Opus”) bridge lending program fit the clients’ needs well. Proceeds were based on as-renovated rents and the loan was structured with soft and hard cost holdbacks, as well as contingency amounts. The total loan amount of $2,745,000 represented 75% of the purchase price and 79% of total project costs. At closing, Opus funded $1,990,000 with future advances to be made monthly as costs are incurred.