|GROSS LOAN AMOUNT||$3,150,000|
|LOAN TO VALUE||65.0%|
$3,150,000 FOR THE ACQUISITION OF A
MULTIFAMILY APARTMENT COMPLEX IN HOUSTON, TX
The borrower sought $3,150,000 in acquisition financing to purchase, renovate, and increase occupancy on a 208-unit apartment community in Houston, Texas. The loan initially amounts to $2,243,000 against the $3,450,000 purchase price. The property, which appraised for $10 million in 2006, sold for $3,450,000 plus an $800,000 rehabilitation plan and $420,000 in closing costs, amounting to a total cost to the buyer of $4,670,000. The borrower contributed $1,525,000 of cash at the closing of the loan, representing 33% of the $4,670,000 total project costs for Chelsea Lane Apartments. The property, which is currently 42% occupied even though the comparable properties in the market have an average occupancy rate of 90%, is currently generating $286,000 of NOI. The $800,000 rehabilitation plan has been fully capitalized through a lender-controlled lockbox where the borrower must fund and deploy $280,000 of equity before loaned funds become available for the improvements, ensuring that the buyer’s value-add strategy can be immediately implemented. The loan provides an attractive basis of $15,144 per unit (or approximately $14 per square foot).