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$2,500,000 Cash-Out Refinance Private Money Loan at a 7% Fixed Rate for a Luxury Single Family Fix and Flip Property Closed in 5 Business Days

Rate: 7% Fixed
LTV: 72.5% As-Is / 65% As-Complete
Term: 9 Months
Amortization: Interest Only
Prepayment Penalty: None
Lender Fee: 1%

Transaction Description

George Smith Partners arranged a $2,500,000 cash-out refinance loan at a 7% fixed on a free and clear luxury 7,200 square foot single family residence located in Laguna Beach, California. The sponsor recently purchased the property for $3,465,000 all-cash at an auction and sought a cash-out refinance loan to close on another acquisition opportunity, but was sensitive to pricing and terms. GSP identified a specialty lender that could lend aggressively on the asset and close quickly. Sized to 72.5% of purchase price and 65% of as-complete value, the 9-month loan is interest only with no prepayment penalty or yield maintenance. GSP identified a lender that understood the submarket and that the sponsor was experienced enough to rehabilitate the property in a timely fashion to either sell or lease as a rental. GSP underscored the sponsor’s track record and significant remaining equity in the property after the cash-out at closing. This ultimately allowed the lender to get comfortable with the significant cash out and to not require an interest reserve, even though the property has no cash flow. The lender allowed the sponsor to fund an estimated $125,000 in repairs out-of-pocket versus a hold back due to the sponsor’s financial strength and track record of execution. The loan funded in 5 business days with an exceptionally low rate and lender fee for quick close private money execution.

Related Financings

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    George Smith Partners arranged $3,500,000 in quick-close acquisition bridge financing for a waterfront Newport Beach multifamily property.  The sponsor approached GSP with an extremely tight closing time frame and a property with one down unit. The sponsor valued certainty of execution above all else, so he could close on the property in short order. GSP identified a non-bank lender with a long history of providing quick close bridge execution, familiar with the location and comfortable with the property’s weak in place cash flow.  Sized to 65% of purchase with no hold back requirement for interest reserve or capital expenditures, the loan carries a 9-month term, interest only payments at a 7.00% fixed rate and no prepayment penalty.  The loan also includes two 3 month extensions and a 1.5% lender fee.


    Rate: 7% fixed
    Term: 9 months
    Amortization: Interest Only
    Loan to Cost: 65%
    Guarantee: Recourse
    Lender Fee: 1.5%

  • $1,430,000 Refinance of a Day Care Facility

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    9 – 17 – 2014
    Transaction Description:  GSP successfully placed the $1,430,000 refinance of a 13,754 square foot family owned Day Care Facility what was operating under a Chapter 11 bankruptcy. The Day Care Facility serves 140 students from kindergarten to 4th grade. Sized to 65% LTV, the 8.99% coupon is fixed for the 12 month term.
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    Rate: 8.99% Fixed
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    LTV: 65%
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  • $4,500,000 Non-Recourse Acquisition Quick Close Charter School

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    4 – 2 – 2014
    Transaction Description: GSP successfully placed the $4,500,000 non-recourse acquisition loan for the purchase of a 41,000 square feet commercial office building located in Oakland, California. The property is currently being utilized and serves as the main campus for a local Charter School. Our Sponsor manages the school which has 650 students ranging from kindergarten to eighth grade. The school lease to the prior real estate owner was about to expire and the financing sourced by George Smith Partners allowed the tenant to take advantage and exercise their option to acquire the property. A second trust deed was recorded at closing bringing the total debt allocation to 73% of cost. The interest only, non-recourse loan closed in three weeks from application to funding.
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    8 – 7 – 13
    Transaction Description:  GSP successfully placed the bridge loan for the acquisition of a hotel, RV park, car wash, restaurant and vacant former casino commercial building located near Death Valley. The restaurant features slot machines and video gambling. The Sponsor purchased the mixed use property from the original developer who owned the asset for multiple decades. The subject is the best performing hotel property in this tertiary market, which serves as a gateway for campers traveling to Death Valley.
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    12 – 12 – 12
    Transaction Description:  GSP arranged the bridge financing of a stalled residential condominium project along the a Pacific Northwest waterfront. The project consisted of a 204- Slip Marina and entitlements for 208 to-be-built condominium units. The original construction lender was seized by the FDIC late 2007 and the project stalled mid-stream. At the time of the bank take-over, $44,000,000 of developer equity and bank debt had been invested in to development. The FDIC later forgave $24,000,000 of the then outstanding debt as a result of the bank failure. Our Sponsor has since engaged GSP to provide construction financing for what is now a re-entitled 373-Unit Apartment site.
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