Looking for a lender for new investor

[Robert Johnson]

I’m looking for a lender who will help me get financing for this property. This will be my first property, and currently my credit is crap….  

I have a partner that has investors we can raise down payment capital. I've been working to find a JV partner with excellent credit to secure the loan for this property, but I don't know that many people so my network is slim. I plan on contracting the current property manager or finding a new company to manage the property, however I will still have a day to day active role in this property.

1. Purchase & Costs

• Purchase Price: $5,700,000
• Rehab Budget: $250,000 (light value-add)
• Closing Costs (6.14035%): $350,000 (covers acquisition fee, legal, escrow, title, finance fees, etc. – rolled into loan)
• Total Project Basis: $6,300,000

2. Capital Stack

• Senior Loan (70%, Asset-Based): $4,410,000
  
• Fixed 5.5% rate
• 25-year amortization
• Preferred Equity (30%): $1,890,000
• Sponsor Cash: $0 (all equity covered by pref equity partner)

3. Loan Metrics

• Loan Amount: $4,410,000
• Debt Service (25 yrs, 5.5%) ≈ $292,000 annually (~$24,350/month)

4. Current Performance

• 2024 NOI: $380,083
• DSCR = 380,083 ÷ 292,000 = 1.30 (meets minimum)
• Entry Cap Rate = 380,083 ÷ 5.7M = 6.67%

5. Stabilized Operations (44 Units @ $1,450)

• NOI = $551,430
• Value @ 6.5% cap = $8.48M
• DSCR = 551,430 ÷ 292,000 = 1.89

[Reginald Truss]

"Robert, for a deal this size most lenders will require either the sponsor or a partner with verifiable credit, liquidity, and track record to step in as the guarantor. If you're bringing the deal and management plan, what you'll need is a capital partner to backstop the financing. If you'd like, I can connect you with lenders and JV groups who can take a serious look once a qualified sponsor is in place."