Lender · Nat'l Commercial Mtg Lender - Round Rock, TX · Member since 2014 · 916 posts · 235 votes
$800,000 Apartment Loan Refinance W/550 Credit Score! Kansas City, MO
Situation: There were 3 borrowers on this nice cash flowing apartment complex but one of them was in the middle of a divorce and his credit was shot. Making matters worse their loan was in default and they had only made 4 payments in the past 12 months. Yet we were able to close them with a 5 year fixed rate in the 7's on a 30 year fixed with an ALT-A lender. Probably more than any area, the emergence of the Alt-A lenders is really helping borrowers in sticky situations get done. Not with short term bridge money...but with long term financing and 30 year amortizations. If you think your loan can not get financing, or you want an option better than private money, give me a call. We fix problems and get deals closed
My question is: Why would you finance a borrower like this? I understand mitigating factors on a divorce, but your borrower was in default. I know you did not really go into much detail but on the surface this seems like a very risky investment at 7%.
Were they on a short amortization that was killing their cash flow? Guess I can see how taking it to 30yrs would help out...
Curious on how many controls you put into place to make sure those payments are coming in.
Asking because I like to give alternative options to borrowers that do not qualify for a traditional commercial loan. Perhaps I could send them your way.
@Mike Garland they were on a 20 year amortization and taking it to a 30 year amortization made the property cash flow and debt service the mortgage well. Based on what was happening with the borrowers, we were able to build a case to the lender that made sense. Since we have the Alt A product, we are able to give borrowers an alternative to hard money.