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David A. Krebs is a licensed mortgage broker with over 15 years of experience offering loan options beyond traditional banks

Commercial Bridge Loan: Cash-Out Refinance on 3 Office Condo Units for Foreign-Owned Company

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office condo refinance for foreign national company

On behalf of a foreign-owned logistics company based in North Miami Beach, Florida, we obtained a two-year bridge loan to refinance the mortgage on its three office condominium units, valued at $1.2M total.

Our client had previously been turned down by a bank because (1) there was inadequate cash flow to support the bank’s requirements for debt service coverage; and (2) the owner of the company is a foreign national (Austrian citizen) who does not file U.S. tax returns or have a Social Security number.

Unable to qualify for traditional bank financing, and the maturity date on their current loan fast approaching, our client needed a quick, short-term bridge loan from a private lender.

We were able to achieve that, and the refinance was beneficial to our client in two ways.

First, we greatly lowered their interest rate.  Since 2011, they were paying their lender an interest rate of 13%.  The new bridge loan we obtained for them has a fixed interest rate in the 9’s, greatly reducing their monthly payments.

Second, we also structured the transaction as a cash-out refinance.  Our client sought $150,000 in cash-out proceeds to use for working capital, but we were able to get them an even higher amount.  Specifically, the $767,000 loan amount (at 65% loan-to-value) not only paid off their existing lender, but also gave them a total of $200,000 in cash-out proceeds, which was $50,000 more than they originally requested.

To avoid our client having to travel from Europe to the United States or making an appointment at a U.S. Embassy, we arranged for a convenient closing via a remote video notary.

Because there is no prepayment penalty, our client will be able to refinance to a longer-term program as soon as they improve their cash flow and have guarantors with more financial strength.

Do you own commercial real estate?  Are you looking to pull out cash, as well as lower your interest rate?  A commercial bridge loan can be the perfect solution.  Please contact us today to discuss your scenario.

Skills

Posted on

March 26, 2021

Miami mortgage broker

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