Tower Capital has arranged a $7,350,000 acquisition loan for a newly renovated, 61-unit, multifamily property located in Phoenix, Arizona. Built in 1968, the property underwent a complete repositioning in 2019, and offers some additional value-add potential through completing the installation of washer/dryers in over 60% of the units.  The 10-year fixed rate loan offers the borrower a competitive rate, and the interest only payments provide additional cash flow to cover the installation of the washer/dryers during the first few years of the loan.

Challenge:
In today’s cutthroat environment, buyers must look for any angle in order to gain a leg up on the competition. Sometimes that involves tying up a property before it goes to market. In this case, the northern California-based investor was able to negotiate a purchase price, based on proforma operating numbers, while the property was still in lease-up. Given the leasing velocity, the lender agreed to issue a formal LOI while the property was 83% occupied, under the stipulation that reached at least 90% occupancy prior to close. Furthermore, Tower Capital was able to convince the lender to increase the loan amount by over $300,000 once the final operating numbers came in.