Transaction Overview
George Smith Partners arranged cash-out permanent financing (65% LTV) for the refinance of a 4-unit multifamily property located in West Hollywood, CA. The Sponsor had purchased and renovated the Property all cash. Building improvements included complete gutting of the units and exterior renovations. The recent improvements allowed the Sponsor to quickly lease-up the Property at market rents, thus increasing the value of the Property. Because the Sponsor had purchased the building and paid for most of the capital expenditures more than 12 months prior to the loan request, this was considered a 100% cash-out financing. This combined with the low unit count made securing a conventional lender challenging. GSP was able to leverage its resources and provided the Sponsor with a 5-year term at a low rate of 3.50%. GSP was able to structure the loan with 12 months of interest only payments, before converting to 30-year amortization thereafter. The prepayment structure is 5-4-3-2-1, giving the Sponsor additional flexibility in the coming years. The Sponsor had a short closing timeline to pull his equity out of this deal to purchase another property already in escrow. GSP worked closely with the Lender and closed the transaction in just 35 days. The Sponsor is using the cash-out proceeds to continue their business plan of purchasing and renovating additional properties.
