Recently Funded -18 Unit Apartment Building in Novato, CA
Lending Resources Group (LRG) recently completed a refinancing of an 18 unit apartment building in Novato, CA for their clients. This 18 unit apartment complex has been in the clients’ family for more than a generation. There was less than $50,000 of debt and client sought to repay that with a low interest loan and take out an additional $450,000 for future investments. LRG found one of the most competitive priced lenders in the multi unit lending marketplace today. Clients wanted a loan that would give them the flexibility to pay it down as much as 20% per year without any penalty. The result was a variable loan issued by Luther Burbank Savings Bank at 3.975% amortized for 30 years and no prepay penalty if clients paid down principal up to a maximum of 20% per year.
Clients had good credit scores but not much liquidity. Fortunately, one of the 2 partners had the required minimum liquidity of $50,000 to qualify for this refinance. Another obstacle was the bank’s requirement that the client carry flood insurance. Clients had never carried flood insurance previously; however, a property survey uncovered that the property is considered in a flood plain. There has been no flooding of any kind in the general area of this building for more than a century. The clients weren’t happy about this and, had the cost not been minimal, the deal may have fallen apart. A reasonably priced flood policy was obtained through the clients’ insurance company. This delayed the closing by a month. LRG started working on this transaction in mid June 2014 and funding took place in mid September. Clients were very satisfied and happy to see this close – so was LRG!