This project involved the refinance and renovation of a 40-unit multifamily property located in the suburb of New Iberia, an area just south of Lafayette, LA. The borrower, Ernest Williams, has a 13-year history as an experienced SFR and multifamily investor, licensed builder, and property manager. He currently owns and manages five other multifamily properties in the area. Williams purchased the property in July, 2019, executing a value-add strategy to renovate the entire 5-building complex. The bridge lender initially committed to the transaction was unable to fund due to internal financial problems associated with the Coronavirus.
The property is intentionally not operational at present, but with Williams’ extensive experience and his experienced crew, the property is projected to be back on-line and 50% occupied within six months at significantly higher rents and an improved tenant profile. To mitigate this risk, we are collecting 6-months’ prepaid interest on the transaction. The loan amount for the project is $2,000,000, representing a 71% LTV, of which we hold $1.12M in total reserves. The borrower has a take-out loan already negotiated with a lender once the property is renovated and projected occupancy has been achieved.
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