West King St, Stasburg, VA 22657
The borrower is requesting a hard money loan to refinance a commercial property purchased in cash in July for $250K ($280K including expenses associated with the sale).Â The property is current a Theater with several offices.Â The property owners plan to maintain the Theater and use it (that is their backround and they own 1 other one currently).Â The offices will be rented out.Â HMB will be holding back $60K in construction funds which will only be reimbursed on finished work.Â The owners have been in the property since July updating it with cash funds so they can officially open the property starting Nov 1, 2012.
|Loan Amount:||$170,000 1st Mortgage|
|Value of Subject Property:||$400K ARV, $350K “As is”|
|Loan to Value:||43%|
|Term requested:||6 Month Balloon|
|Exit Strategy:||Refinance property|
HARD MONEY BANKERS COMMENTS:
The pros are:
The lender will have good collateral on an investment property at a low LTV.Â Â The Borrowers have cash which they use for their investments.Â They need this cash out for additional funds to renovate the building.
The cons are:
The borrower’s exit strategy of refinancing could take longer than expected in this market.