SFR – Alamo, CA
The borrowers were creditworthy and qualified with sufficient income and assets, and had a 25% cash down payment. However, the breadwinner had recently accepted a job with a new company, and despite being employed consistently in the industry for 20 years, the bank underwriters considered the temporary break in income as a non-qualifying factor. The borrowers did not want to lose an opportunity to purchase a great investment property by waiting 6 months for the new employment and income to be considered seasoned. So they requested a private loan from Private Capital Investments. We structured a very creative loan program, with a 5% interest only rate and a 5% lender exit fee, which allowed the borrower to manage the debt during the loan term, and also satisfied our investor’s yield requirements. Private Capital Investments closed the loan in 5 business days from loan submission.
SFR – Ben Lomond, CA (Primary residence)
The borrower was in need of quick capital in order to take advantage of an investment opportunity. 3rd position loans are extremely rare and challenging to underwrite. However, we agreed to this structure based on the following factors; the senior loans were both bank loans with low rates and extended maturity dates, the size of our loan in proportion to the 1st and 2nd was manageable, approximately 2 to 1 and 1 to 1, the combined LTV was only 51%, providing significant equity protection, and the borrower was very creditworthy. We were also comfortable with the business purpose of the loan, a well planned and feasible improvement project, which was located on the same street as the subject property.
1st and 2nd combo
Palo Alto SFR
The subject property was approximately 65% complete at the time Private Capital Investments (PCI) arranged financing. The loan paid off all outstanding debt, satisfied delinquent property taxes, created an interest reserve, and covered all remaining construction related expenses. The borrower was an experienced real estate investor/developer and had a significant amount of cash equity invested in the project. The General Contractor was very reputable and experienced. PCI has successfully worked with both of them in the past. Upon completion the property will be aggressively marketed for sale. Construction Completion loans are very appealing to PCI as the borrower typically is financially invested and is very motivated to complete the project and sell. These loans fit well with our business model of providing expeditious, short term and opportunistic capital to borrowers with development wherewithal and feasible and deliberate exit strategies.
The borrower was a seasoned developer who identified the subject property as a “value add” opportunity and negotiated a favorable sales prices on the caveat he closed quickly. Private Capital Investments provided a loan based on the true value of the property, which allowed the borrower to maintain more liquidity so he could complete the planned improvements. PCI's speed and efficiency were critical so the transaction could closed on time and ultimately the borrower will realize a significant profit.
The subject property was under construction and in contract to sell to a motivated buyer, contingent on the timely completion of the house. The borrower was over budget and had depleted funds as he was in the process of completing other projects. The borrower was a seasoned investor and developer and was poised to make a substantial profit if he could deliver a finished product. Private Capital Investments provided a loan to satisfy the completion budget and provide for an interest reserve so the borrower did not have to make payments for the duration of the loan.
SFR – Bridge Loan
Los Gatos, CA and Aptos, CA
The borrowers were in contract to purchase a large property, consisting of 2 parcels, in Aptos, CA for $3,050,000. Their existing primary residence was listed and was being actively marketed. The borrowers needed to access equity from the Los Gatos property in order to close on the Aptos property. However, the scheduled purchase closing date was prior to the house selling so despite their creditworthiness and financial stability the borrowers were in need of quick and efficient capital. Private Capital Investments provided an 18-month loan to give the borrowers plenty of time in the event there were any delays with the sale of their existing home. We were able to close within a matter of days of receipt of receipt of a complete due diligence package. The bridge loan was secured by a 1st position lien on both properties. The borrowers provided a significant cash down payment.