GSP successfully placed the cash-out refinance on two apartment buildings in the Echo Park neighborhood of Los Angeles. The Borrower had acquired the dilapidated buildings with low leverage debt before investing personal equity to overhaul the buildings and stabilizing the cash flow with market rate rents. GSP identified a lender that agreed to factor in “sweat equity” and return 90% of the Borrower capital. The new 10 year fixed-rate loan is non-recourse and amortizes over 30 years. The cash-out allowed the Sponsor to lower their yield to their equity investor, achieving a higher return on cost.
