A local investor saw a value-add opportunity for an apartment a stone’s throw away from the Oregon State University Campus. To avoid locking into a long-term rate with an underwhelming operational statement, this entrepreneur sought short term bridge financing to set him up for a favorable long-term loan.
Over the years he acquired many rental properties in the Corvallis area. In time these rental properties increased in value while the debt was significantly reduced. To retain some of his liquidity he utilized one of his low leveraged rental properties as additional collateral. By significantly reducing his cash to close, he was able to keep cash on hand for property improvements and any unexpected operational expenses.
Over the coming year, rents will be brought to market and property improvements will be made to justify rent increase and attract new tenants. At that time, he plans to refinance with a traditional long term lender and hopefully a more favorable rate environment.
What we like about deal.
- LOCATION, LOCATION! Adjacent to University in a college town.
- Student Housing – Stable Demand for short term housing.
- Strong Borrower
- Logical and Achievable Exit Plan
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