Earlier this year, I helped a client refinance a Mixed-use building in Brooklyn, NY. Since then, this person, which happens to also be a Real Estate Broker, has relocated their business to the State of Florida. They recently saw an opportunity to purchase a luxury home in Palm Beach. The plan was to buy the property and rent it out to high net worth executives. These executives tend to pay over market value for accommodations, and usually lease the properties for a year at a time.
This loan was originally quoted by one of my investors at a 60 LTV (loan to value). However, upon underwriting review the lender counteroffered and offered only 50% LTV. In addition, they wanted to escrow (hold) 12 months payments. I discussed this with my client and she expressed to me that this would create a liquidity hardship. She was unsure of how to proceed but was aware that her down payment of 40,000 was in jeopardy.
Time was of the essence and I had to quickly find a better solution for my client. I was able to find another investor that was able to offer better terms. Although this investor’s interest rate was a slightly higher, they were willing to lend 65% LTV and hold no escrow. This was much better option for my client. Therefore, I re-assigned the appraisal and closed the deal with my second investor.
During the transaction, tension was high and deadlines had to be extended. Nonetheless, I was able to get my client the loan that made the most impact , so that her business model would work. I Understood my clients need to stay in a liquid position. They were extremely grateful that I was able to facilitate a second offer and closed the deal that worked for them.
Every client is important and we will find the right financial vehicle for you.