You did the hard part. The units are leased and the rents are up. This loan is based on the rent roll you have today, not a trailing year that still shows the empty units.
The trap after a lease-up is the trailing twelve months. Six of those months might show a half-empty building, and a loan based on that history comes back hundreds of thousands of dollars short of what the building earns today. Waiting a full year for the T-12 to catch up means another year of bridge interest.
This loan is based on the rent roll in place now. It's also qualified on the interest-only payment, which supports more loan on the same income than a 30 year amortization does. Together, that's usually what closes the gap between the new loan and the bridge payoff, and often leaves cash on top.
On recently stabilized apartment buildings, loan amounts typically range from $500,000 to $20 million and above. Maximum LTV is typically 75%.
These are typical ranges, not a quote. Your rate and loan amount depend on the property, your credit, and the market.
These are typical terms. Yours depend on the building, the market, occupancy, and the term you choose.
You bought it half empty on a bridge loan and filled it.
New units, new tenants, new rents, and an old T-12.
Collections and occupancy are up since the new manager took over.
The clock is running and the building is ready.
Higher rents mean a higher value, and room for cash out.
Mostly stabilized, with the last handful being leased.
The building: 48 units bought on a bridge loan with heavy vacancy, renovated and leased up over about 10 months. Appraised around $6.5 million.
The problem: The T-12 showed about $290,000 of net operating income because of the lease-up months. A loan based on that came to about $3.3 million, well short of the $4.1 million bridge payoff.
The loan: Based on today's rent roll, about $395,000 of net operating income, and qualified on the interest-only payment: about $4.5 million.
The result: Bridge paid off, closing costs covered, and cash back to the owner, without waiting another year for the T-12 to catch up.
Illustrative figures, rounded. Your terms depend on the building, the market, and the loan.
For owners whose building is better today than its history shows.
Pay it off with a longer, fixed-rate loan instead of extending at a higher rate.
Every month on bridge debt costs money. This loan doesn't need a full year of stabilized history on select loans.
Rents went up, value went up. Take the cash out and put it toward the next one.
The loan is based on the rent roll in place now.
What you own, what's owed on it, and what you want the loan to do. A rent roll and T-12 are all it takes to start.
The loan amount, the structure, and the cash to or from you at closing, before you pay for an appraisal.
Appraisal, environmental, title, and insurance get ordered and kept on schedule. You always know what's left before closing.
Loan documents signed, the old loan paid off, and the rest wired to you.
Send today's rent roll and your bridge payoff amount, and we'll come back with terms.
