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In the competitive world of real estate investment, time is often of the essence. This case study highlights how TaliMar Financial successfully partnered with a broker to facilitate a hard money loan for a borrower needing rapid financing to purchase and renovate a distressed 5-unit apartment building. The borrower faced challenges securing conventional financing due to the property’s condition but found a solution through hard money lending.
Type: 5-Unit Apartment Building
Condition: Poor, requiring extensive renovations
Location: High-demand urban area
Loan Amount: $1,200,000
The borrower, an experienced real estate investor, aimed to purchase the property, undertake significant renovations, increase rents, and ultimately refinance the hard money loan with conventional bank financing.
The property’s poor condition posed a significant hurdle for securing traditional bank financing. Moreover, due to the high demand in the area, the borrower needed to close the deal quickly to prevent losing the opportunity to other investors.
A seasoned real estate broker, familiar with TaliMar Financial’s hard money lending process, brought the deal to us. The broker understood the urgency and worked diligently to gather all necessary documentation, including:
Detailed property information
Renovation plans and cost estimates
Borrower’s financial statements and credit history
Projected post-renovation rental income
With the loan approved and funds disbursed quickly, the borrower was able to close on the property without delay. The renovations commenced immediately, aligning with the borrower’s detailed renovation plan. Throughout the renovation period, TaliMar Financial maintained close communication with both the borrower and the broker to ensure everything stayed on track.
Completion Time: 9 months
Total Renovation Cost: $225,000
Post-Renovation Property Value: Increased significantly, allowing for higher rental rates
The borrower successfully increased the rental income as planned, making the property financially stable and more attractive to conventional lenders.
After completing the renovations, the borrower transitioned to the final phase of the strategy: refinancing the hard money loan with a conventional bank loan. With the property now in good condition and generating increased rental income, the borrower secured conventional financing with favorable terms, successfully paying off the hard money loan.
This case study exemplifies the critical role brokers play in facilitating hard money loans and how swift, flexible financing solutions can turn around seemingly challenging real estate investments. TaliMar Financial’s ability to approve and fund the loan quickly, combined with the broker’s efficiency, ensured the borrower could capitalize on the investment opportunity without delay.
By leveraging hard money lending, the borrower transformed a distressed property into a profitable asset, demonstrating the potential of strategic financing in real estate investment.
Speed and Flexibility: Hard money loans can be approved and funded rapidly, essential for competitive real estate markets.
Broker Collaboration: Experienced brokers can streamline the loan process, ensuring all documentation is accurate and complete
Renovation Financing: Hard money loans are ideal for properties needing significant renovations that traditional lenders might shy away from.
Exit Strategy: Having a clear exit strategy, such as refinancing with conventional financing post-renovation, is crucial for the borrower’s success.
TaliMar Financial is a private mortgage fund that offers investors the ability to participate in the growing market of private real estate debt. Since 2008, TaliMar Financial I has focused on providing real estate investors and operators with the capital they need to purchase, renovate, and operate residential and commercial properties. Our experienced executive team has funded over $450 million in short term debt secured on residential and commercial real estate primarily throughout Southern California and has returned over $40 million to investors in monthly distributions.
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