Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $4,940,000
- Month: December
- Year: 2017
Our client is a professional real estate investment firm with extensive experience in acquiring, renovating, and managing multifamily projects in the Seattle area and a repeat client of Opus Bank (“Opus”). The client had 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 sub-market and, based on traditional lender underwriting, the requisite equity required to complete the acquisition would have resulted in diluted returns.
The client owns other properties in the subject’s area and this helped to estimate upside capability as well as the costs necessary to unlock the potential. The budget to acquire and improve the property was $6,435,000, which included a $5,500,000 purchase price and $750,000 in hard costs. As the property did not have break-even debt coverage going in, an interest reserve was established to fund shortfalls.
Opus’ bridge lending program fit the clients’ needs well. For this loan, proceeds were based on as-renovated rents. The loan was structured with soft and hard cost holdbacks as well as contingency amounts. The total loan amount of $4,940,000 represented 90% of the purchase price and 78% of total project costs. At closing, Opus funded $4,040,000 with future advances to be made monthly as costs are incurred.