Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $4,487,000
- Month: April
- Year: 2016
Opus Bank (“Opus”) provided a $4.8 million acquisition and renovation bridge loan for a portfolio of four multifamily properties in Long Beach, CA. These properties were located in vibrant, infill communities and offered substantial upside due to in-place rents that were below current market rents. To capture the higher market rents, the business plan included both interior and exterior renovation of the units. Additionally, the client was coming out of a 1031 exchange and needed a quick, high certainty execution.
The client’s business plan was to perform the improvements, increase rents, and refinance with long-term fixed rate mortgages. Given the client’s investment experience within the submarket, they felt confident that a $400,000 capital renovation budget would be sufficient to bring the subject to market. The $9,000 per unit renovation plan was split between interior and exterior renovations. Interior renovations included new countertops, appliances, fixtures, paint, and flooring. Exterior renovations included a new roof, exterior paint, landscape upgrades, and resurfaced parking areas.
Opus’ Small Balance Bridge program was a perfect fit for the client’s needs. Loan proceeds were based on as-renovated rents, and the loan was structured with renovation holdbacks as well as contingency amounts. The total loan amount of $4.8 million was 70% of the stabilized value. At closing, Opus Bank funded $4.5 million, 75% of the purchase price, with future advances to be made once all the renovations have been completed at each property. When fully funded, the total loan amount will represent 76% of total project costs.