GSP Closes $3,075,000 Interest Only Purchase Money Bridge Loan on a Baldwin Hills 52-Unit Apartment Portfolio

Transaction Description: George Smith Partners placed a $3,075,000 (75% Loan to Purchase Price) bridge loan on a 3-property apartment portfolio in Baldwin Hills, California. The borrower plans on renovating and turning a significant portion of the 52 units, and requested a loan with no prepayment. GSP secured an Interest Only Loan at 3.25% (Prime+0), 12-month term, with no prepay, at 75% loan to cost.

Challenge: The Borrower requested high leverage bridge money for properties with occupancy and collections in the low 80% range. This is typically problematic as lenders prefer to use in-place income and/or a vacancy factor on the in-place collections. The location of the property was also challenging since many of the higher leverage institutional sources have more difficulty offering bridge money in weaker markets.

Solution: GSP was able to demonstrate that the lack of collections and amount of deferred maintenance was a direct result of poor historical management and not an underlying consequence of a weak market. GSP also worked with the borrowing entity to present the lender with a resume of past successful business plans in the area. Ultimately the lender trusted the ability of the borrower to execute renovation and re-stabilization of the property and provided the client with aggressive rate and terms.