$3,624,000 Multifamily Value-Add Recapitalization for 119 Units in San Antonio, TX

Rate: L+535
Term: 36 Months
LTV: 65%
Extension Options: Two 6-month options
Amortization: Interest Only for the initial term, then 20 year amortization during extensions, if exercised
Prepayment Penalty: None
Guaranty: Non-Recourse

Transaction Description:
George Smith Partners successfully arranged $3,624,000 to finance a value-add reposition of a 119-unit apartment in San Antonio, TX. The Lender funded $3,224,000 upon closing and held back $400,000 for capital expenditures to be invested over the next two years.

Challenge:
The Property had been purchased less than 1 year earlier with a 1-year seller note. There was substantial deferred maintenance that had not yet been completed, so the business plan was just starting. The client’s “go-to” lender was not interested in the financing due to the size and the still required “heavy lift”. Most lenders in this this size category require full recourse, which the Sponsor would not provide.

Solution:
George Smith Partners located a lender who the client didn’t previously know and who is accessed only thru a select group of mortgage brokers who looks for these types of transactions. The Lender agreed to provide an additional $400,000 for the renovations. Some negotiations were required to restructure the recourse provisions to springing recourse in the event of involuntary bankruptcy.

Advisors

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