Mini Bridge Loan
Opus Bank’s Structured Finance division provides $2,200,000 Mini-Bridge financing for the purchase of an 18 unit multifamily garden style property in Portland, OR
Overview of Transaction
- The client, a professional local real estate investor specializing in 'value-add’ opportunities, identified an off-market opportunity with under-market rents.
- The seller was asking for $2,675,000 for a property with a $1,850,000 as-is appraisal valuation.
- The client was prepared to invest nearly $1,400,000 in cash in order to purchase and renovate this project to achieve his targeted market rents and stabilize the property.
- The client had entered into escrow with a 36-day hard close date.
Significance of Transaction
- The broker suggested that the investor speak to Opus Bank regarding Opus’ new Mini-Bridge Multi-Family Acquisition Program, which allows Opus to include an as-stabilized appraisal valuation as part of the credit underwriting package.
- Opus’ client prepared pro forma income statements looking out 18 months with a detailed total renovation budget of $132,000 covering a number of improvements.
- At closing, Opus provided a $1,950,000 initial funding. Once the client achieves his pro forma income, Opus Bank will fund the remaining $250,000 earn-out.
Opus Bank's Role
- Opus' new Mini-Bridge Multi-Family Acquisition Program was a perfect fit for the client's needs as the program sized loan proceeds based on an as-stabilized valuation and had a built-in interest reserve so that the borrower didn't need to make monthly payments.
- Opus’ client only needed $715,000 plus closing costs to purchase this property, which allowed the client to take the additional liquidity and invest in another property they desired to add to their portfolio.
- Most importantly, this was done in the 36-day hard close date time frame.