100+ units · ~$8M · Bank/credit union · Purchase + renovation · 2024
- Situation
- More than 100 units with in-place rents below market. The plan was unit renovation and rent increases as units turned, with the renovation funded alongside the purchase rather than out of pocket.
- What the lender needed
- A lender that would fund the purchase and the renovation budget together, release renovation money as work was completed, and underwrite to market rents. In-place rents did not support the coverage the lender required; market rents after turnover and capex did.
- How it closed
- Bank/credit union acquisition loan at up to 80% of cost on purchase plus renovation. 5-year fixed rate, 25-year amortization, no prepayment penalty.