Transaction Overview
GSP arranged the refinance of a 5-unit apartment complex located adjacent to Beverly Hills. The loan sized for $430,000 per unit. The property is a Class A condo-mapped rental property that is well appointed and very well maintained. The high quality of the property and its prime location allows Management to achieve rents at a very high dollar per foot.
Challenge: The loan request was in excess of most lenders limit of loan dollars per unit. The cash-out requirement amplified the dollar per unit conflict. The Borrowers’ rent per foot ran the risk of underwriters writing down actual collections. Recent unit turn-over only provided 6 months of collection seasoning.
Solution: GSP sourced a long-standing correspondent relationship and was able to demonstrate to the lender, a history of the property being maintained in excellent condition. The Borrower experience allowed the bank to use the seasoned income at funding, and underwrite to a lower debt coverage ratio from the initial LOI in order maximize loan proceeds.
