Multifamily Purchase + Renovation Loan – East Moline, Illinois
Lima One Capital financed a $3.7 million multifamily bridge loan for the purchase and renovation of this East Moline, Illinois, multifamily property in the Quad Cities area of Illinois and Iowa. By offering 75% leverage on both the $3.9 million purchase price and the $1.2 million renovation budget. This resulted in a 70% LTARV on the after-repair value of $5.3 million, and in the process allowed the investor to add significant value to the property.
This interest-only bridge loan allowed the investors to execute their strategy of upgrading almost all units in the property (only a dozen or so were recently renovated) and also adding amenities to the community. The flexibility to keep units unoccupied to complete rehab will help the investor prepare this property for take-out financing. No wonder the commerical real estate broker representing the buyers on this transaction guided them to Lima One.
Multifamily Loan By the Numbers
- Loan Purpose: Purchase and Value-Add Renovation
- 114 units
- Loan Amount: $3.7 million
- Loan-to-Cost Leverage: 75%
- Loan-to-After-Renovation-Value Leverage: 70%
- After-Repair Value: $5.3 million
- Loan Term: 24 months
- Interest Only
Making Renovations Possible
This multifamily bridge loan gave the investors an interest-only option while they renovated about 100 units at this property. The ability to keep costs low while paying for rehab and carrying unoccupied units under renovation was a big asset for these investors. This allowed them to add value to the property, extend the life of units, and finish the renovation project that was just barely underway when they purchased the property.