Shahin Yazdi successfully placed a 100% cash-out refinance loan on an owner-user property that was previously Free & Clear. The two operating companies occupying the property were reporting a negative cash flow. The 10 Year term is fixed for 5 Years at 4.75% before floating over Prime.
Challenge: Owner-User loans require the operating companies show a profit. In this case, the owner of the property owned both businesses that are in occupancy and both reported huge losses. One 50% owner refused any level of guarantee. The remaining guarantor received the majority of his income from a gentleman’s club he owns and operates.
Solution: The capital provider relied on the financial strength of the remaining guarantor (specifically his liquidity) and the quality and strong location of the collateral in order to obtain comfort in securing the moderate leveraged debt
