What it took to close this 121 unit deal

Question

We just closed on a 121-unit in Fort Worth.

Here are some things that a spreadsheet doesn’t tell you.

Lender requirements can shift late in the process. We were initially expecting agency debt, but last minute requirements changed and the proceeds no longer worked for the deal. So we pivoted to bridge. Good thing we had already modeled bridge from the start.

You may have to restructure entities to align with lender expectations. We formed a new borrower entity late in the process and updated the org chart to match what the lender required. That meant new documents, new approvals, and making sure everything flowed correctly from a legal and ownership standpoint before we could close.

Multiple legal teams get involved. Lender counsel, borrower counsel, title, everyone reviewing language and redlining documents. A lot of back and forth. Signature pages get revised. Loan agreements get updated. You think you are done, then another comment comes in.

Title items can surface that have to be cleared before anyone wires money. In our case, there were legacy items that had to be resolved before we could get clean title. That meant coordination and making sure everything was cleared so funding could happen.

None of that shows up on a spreadsheet.

Getting this deal to closing was a different animal.

Glad we got it done.

Now the real work begins.

Diego Alvarado · Answer

Hi @Garret Rumbea

Thanks for the insight, I have a similar situation with a client where he couldn't go with the bridge loan so we had to have hard money for a year. Quite costly, but it worked out well for him.

Commercial lending is not the same than residential that is for sure.

Kyle Vogeler · Answer

Very insightful post - especially to someone who has only purchased properties under 50 units in size and is looking to grow into bigger projects. Will be important to remember that the larger the deal size, the more hoops you have to jump through.