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The Madison Group Arranges $1,207,000 loan for an Apartment Purchase in Illinois

Tags: multifamily loans nationwide, apartment financing, nonrecourse apartment loans, creative financing
Wednesday, Jan 31, 2018
by Barb

The Madison Group (TMG), a leading source of multi-family financing nationwide, arranged the $1,207,000 loan for the purchase of an apartment complex in Lebanon, Ill.  The borrower’s goals were to purchase the buildings with a non-recourse loan, low costs and a low interest rate. TMG secured the financing with a 10-year fixed rate of 4.12% and a 30-year amortization.

The apartment complex consists of three very well built and maintained 8-unit luxury townhome buildings, for a total of 24 rental units. The two-story buildings, built in 2009, are considered garden/low-rise units built on a 1.59 acre site.

The property is in the Greater St. Louis, Mo. area, which features 30 colleges and universities and has a population of approximately 2.9 million.  The Scott Air Force base is also nearby.

Currently the apartments are 100% occupied and combined with low expenses, make the net operating income very good.  All of the rental units have stainless steel appliances, granite countertops, upgraded flooring and in-unit washers and dryers.

Among the challenges to securing financing for the borrower, the historical information was not consistent, as the seller had purchased the units in 2015 as a foreclosure.   At that time, the seller had to evict several tenants and remodel most of the units delaying lease up. The units also had a tenant mix of students and military making the property more difficult to finance. The rents stabilized in July 2016.

“We were able to use the annualized trailing three years’ income and expenses to get the loan proceeds  that made this loan work at the purchase price agreed upon by the buyer,” said Angela Kesselman, TMG’s associate director of finance.  “We found a Freddie Mac loan that gave us the proceeds, rate and non-recourse loan the borrower desired.

 This buyer received a great rate in a time of rising interest rates as the lender locked the rate at an earlier period.  The buyer really was able to get everything he wanted.  I think it will perform well for him moving forward,” Kesselman said.

The financing was arranged by Angela Kesselman at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including:  multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States.  Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital.  TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group can be reached at 435-785-8350 or by emailing Kesselman at angela@madisongroupfunding.com.