Tower Capital recently secured a $1,250,000 loan for a 10-unit multifamily property located in central Phoenix. The property was acquired by the borrower in February 2019 who performed an extensive renovation and rebranding of the property. Each unit has been completely remodeled with windows, doors, flooring, cabinets, bathrooms, countertops, and appliances. Electrical and plumbing upgrades were completed as well as new landscaping and exterior paint and décor. The property was 100% occupied at the time of the refinance.

The small balance Freddie Mac loan provides the borrower a 20-year term, fixed for the first 5 years at 4.18%. The 5-4-3-2-1 stepdown prepayment offers the borrower flexibility should they wish to sell or pull cash out of the property through an additional refinancing down the road.

The borrower initially planned to sell the property, which was scheduled to close in Mid-March 2020, just as the COVID lockdowns were being put into place. The buyer got cold feet and walked away from the loan just days from closing. Given the current market conditions the borrower decided to switch strategies and hold on to the property. The Freddie Mac loan allowed the borrower to pay off the existing debt, return equity to their investors, and provide some flexibility should they wish to sell in a few years.