Client: Real Estate Owner Requiring Funding for Capital Improvements
Issue at hand: The owners of a co-op needed to do facade work on their building under Local Law 11. Four owners each have 25 percent shares or interest in the building. The LTV is strong, but there are few banks that will do underlying co-op loans, and even fewer that will do them with such large individual ownership.
Need: The group needed $1.5 million and a 15-year self-liquidating loan. Its members also would not sign personally, so they requested a nonrecourse loan.
Solution: The Liquidity Source needed to get a new corporate resolution so the co-op would be able to guarantee the loan and the shareholders would be assessed accordingly. We knew within 14 days that we could get this loan accomplished, and we secured a 15-year self-liquidating loan within 60 days of this request.
Client: Real Estate Owner Needing to Improve Cash Flow
Issue at hand: The owner of two buildings needed to restructure and refinance to improve cash flow. One of the buildings was negative cash flowing and the other had a high rate of interest. The restructuring and refinancing had to be done at one bank, and the owner was looking for an interest-only loan. That is extremely unusual, as few banks issue interest-only commercial loans.
Need: The owner needed an estimated $3.9 million in interest-only vehicles. These vehicles, called CELOCs, are extremely rare.
Solution: We found a bank that could do both loans for 10 years, interest only; two five-year deals with reset, plus an equity line of credit for a cash backup. We got the funding and saved the client almost $70,000 a year in cash flow.
Client: Builder Needing Loan for Next Spec House
Issue at hand: The owner of a construction firm needed a loan for his next project building a spec home that would not be in contract. The builder specialty is in the Hamptons. But while banks have loosened their credit somewhat, it is not easy to find financing for unsold spec homes in today’s market.
Need: The owner needed a $3 million loan at a competitive rate for one of his properties.
Solution: The Liquidity Source reviewed the corporate entities and the personal financial statements. We felt these candidates were not only strong financially but that they knew their business, had a strong model and had done this for 30 years, and we got them their $3 million loan.
Client: Personal Loan for Newly Unemployed Homeowner
Issue at hand: A foreign buyer bought an apartment in New York City. He made a down payment of $860,000 and was scheduled to close in June 2013. However, in March, he lost his job. With no job and the scheduled close looming, he was in danger of losing the $860,000 down payment.
Need: The buyer needed a bridge loan in order to close in 30 days.
Solution: The Liquidity Source found a bridge loan funding source to close in 14 days. The buyer was able to pay what he owed and did not incur a loss. He now has a new position, and we found him a funding source to take out the bridge loan at 3.8 percent.
Client: Commercial Real Estate Owner Needing to Refinance
Issue at hand: An owner was looking to refinance his commercial building, which leases for $216,000 a year. However, his cash flow did not meet his obligations, as he has property worth $7.5 million that he is converting to condos, resulting in negative cash flow despite his liquidity.
Need: He needed to borrow $ 1.5 million.
Solution: Despite the fact that banks almost always insist on a positive cash flow, we found one that understood the owner was underwater from a cash flow position but that his liquidity made up for the loan request. Not only did we get him a loan for more than $2 million but also a commercial interest-only loan, allowing him to pay off the existing mortgage and having a line of credit to use at will.