The borrower would like to refinance this iconic and well-recognized 26-unit apartment building settled on Dayton’s most exclusive waterfront location. All but one unit is occupied and the borrower wants to refinance the building’s $290,000 Land Installment Contract, use $10,000 to rehab the remaining unoccupied unit, and have cash left over for closing and capital reserves. The building has been fully rehab’d since its purchase in 2005 with new kitchens, hardwood floors, HVAC, electric, etc. The $1M valuation is based on an 8.5% cap rate (as opposed to comps or an appraisal). Net Operating Income is currently $60,000, which provides for a strong DSCR.
The borrower has been in real estate his entire life. He lives in the building and has a significant equity investment. He has a good credit history, but a weak credit score, in part because his best trade lines are not reporting to credit agencies. (e.g. He has a $15,000 line of credit with Ace Hardware in good standing, but unreported.)
The loan to value (LTV) provides a 65% cushion of equity. Additionally, the rental income is $123,000 annually and is 4.85 times the debt service coverage ratio (DSCR). This opportunity presents an investor with a commercial note at 10% for 2 years, secured by a recorded first mortgage lien or deed of trust on this property.
|Loan Term:||2 years|
|Source of Income:||Monthly Rents|