Partnership Acquisition and Rehab Refinance Financing for Stabilized Multifamily

Transaction Description:  Shahin Yazdi successfully placed the 60% LTV, cash-out refinance for a 10 unit multifamily building in the South Bay Area of Los Angeles. The Sponsor acquired the remaining 50% interest in a jointly-owned apartment complex from their partner, and will use the remaining funds to rehab the building. The global cash flow of the Sponsor was below the lender’s requirement and the expenses have been above market for the last two years. Mr. Yazdi demonstrated that the expenses were capital related although expensed on the P&Ls. The moderate LTV mitigated concerns concerning the borrower global cash flow. The Sponsor requested a flexible financing plan to maximize exit options upon completion of his business plan. The 15 year term loan amortizes over 30 years and has no prepayment penalty, allowing the Sponsor multiple options after completion of rehab. The 4.50% rate is fixed for five years before floating over the WSJ Prime Rate + 1.25%.