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Student Housing Financing

Refinance of $2,600,000 for Student Housing Project in Utah

Tags: student housing financing, student housing refinance, commercial loans for student housing
Thursday, May 24, 2018
by Jeff Meierhofer

The Madison Group (TMG), a leading source of financing for student housing nationwide, arranged the $2,600,000 refinance for a 9-building student housing project in northern Utah. The borrower was interested in maximum long term cash flow and an aggressive fixed rate. The finalized terms of this loan were 5.04% interest rate, 12-year term, and a 30-year amortization. 

The refinance is for nine buildings with a total of 27, 3-bedroom units. The buildings, which were newly constructed between 2015-2017, are in a great location, close to schools and commerce.  The rental market in the Logan, Utah area has been, and continues to be very strong. The housing units have been upgraded and are 100% occupied.

As this is Phase 1 of the property and Phase 2 will be built adjacent to it, the necessary access and easements needed to be secured. A clubhouse will be built during Phase 2 and it was necessary to get the lender and underwriter to allow funding before the amenities were completed.

TMG worked with the title company, the legal professionals and the lender to secure acceptable easements between Phase 1 and 2.  The lender did not take title to the phase 2 land, which allows the borrower to build with a lender of the borrower’s choosing.

“Securing the financing took longer than expected,” said Jeff Meierhofer, TMG’s Director of Finance.  “In my next life I may consider being an attorney so I can get legal documents faster! But all parties stayed focused and the borrower got a great rate fixed for 12 years.”

The financing was arranged by Jeff Meierhofer at The Madison Group.  435-785-8350

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Rental Property Financing

Financing for an investment property in Utah

Tags: Investment property loans
Wednesday, May 02, 2018
by Jeff Meierhofer

     The Madison Group (TMG), a leading source of commercial real estate financing nationwide, arranged the $1,700,000 financing for the purchase of an investment property in Park City, Utah. The property consists of four luxury condos to be used as seasonal rentals. The finalized terms of this loan were 5% interest rate, 5-year term, and a 30-year amortization. 

     The borrowers were a group of investors looking to buy individual rental condo units in Park City. The properties were in the process of being built so timing was important in order to be able to provide the loan when the certificate of occupancy was issued. The properties are well located at the base of the Park City Mountain Ski Resort Canyons area. 

     Among the challenges for arranging the financing, the properties had not yet been built, so they did not have any rental history. They are also in an area with a large number of other rental properties, which could cause competition for the different units.

     It was necessary to time the appraisal and closing for the loan to meet the seller's obligation of funding shortly after the certificate of occupancy was issued. The loan was made to an LLC with two of the individuals signing personally. They received an aggressive rate at 5%, with a 30-year amortization. This will provide maximum cash flow. The loan has a limited prepay in case the borrowers decide to sell one or more of the units.

     “I can say that not every lender wants to make a loan on recently finished non-warrantable rental condos,” said Jeff Meierhofer, TMG’s director of Finance. “The first seven lenders we contacted declined the loan based on that information, but we were able to find the right fit for the borrower. The units are very nice units in a great area, so our lender could see through that.”

The financing was arranged by Jeff Meierhofer at The Madison Group.

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RV Park Financing

The Madison Group Arranges a $6,300,000 loan for Texas RV Park Purchase

Tags: RV Park financing, Nonrecourse loan, Texas MHP financing
Wednesday, May 02, 2018
by Jeff Meierhofer

     The Madison Group (TMG), a leading source of RV park financing nationwide, arranged the financing for the $9,750,000 purchase of an RV park in Texas.  The borrower, a repeat client of TMG, was interested in a non-recourse loan. The finalized terms of this loan were 5.6% interest rate, 10-year term, and a 25-year amortization. 

     This 4-star RV park is in an excellent location with 210 spaces on 23.7 wooded acres.  It has a stable income source from long-term recreational vehicle tenants and has an occupancy rate of 85%.  The park has common amenities including a clubhouse, shuffleboard court, big screen TVs and exercise, laundry and storage facilities.

     The borrowing entity for this transaction was a group of 17 investors. This made it particularly challenging to get a non-recourse loan.  Because the borrowing entity needed to have non-recourse to the LLC and not to the individuals, the loan was structured so only three borrowers needed to sign the carve-out provision. This paved the way for the borrowers to bring in additional capital through an investment group. The down payment was derived from a small group of individuals and silent investors.

      We do a good deal of mobile home park financing, and through our direct lenders we were able to source the debt for this RV park,” said Jeff Meierhofer, TMG’s director of Finance. “I would say it's an unusual day when an RV park gets a non-recourse loan. We were happy to provide this for a repeat client.”

The financing was arranged by Jeff Meierhofer at The Madison Group.

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Senior Housing Refinance

A successful closed loan: $12,339,000 cash out refinance of a senior housing property in Utah

Tags: senior housing loans, multifamily loans
Monday, Apr 30, 2018
by Angela Kesselman

     The Madison Group (TMG), a leading source of multifamily financing nationwide, arranged the $12,339,000 cash out refinance of a senior housing multifamily apartment project in Utah.  The borrower had reached stabilization of the project and needed to get a nonrecourse loan with maximum leverage.   TMG secured the financing with a 10-year fixed rate of 4.62% and a 30-year amortization.

     This beautiful new senior housing project is ideally located in metro Utah.  The property is an age-restricted, multi-family property.  Two buildings with a total of 90 one-, two- and three-bedroom units are located on a 3-acre site.  Phase 1 of the project has been fully occupied for 12 months and phase 2 finished leasing at the beginning of the year. 

    TMG had arranged the financing for a two phased construction loan and the term of construction loan was coming due.  The transaction presented several challenges including the fact that the majority owner sought a cash out refinance loan to buy out his partners, the property had just reached stabilization, and the borrower needed maximum proceeds. 

     TMG reached out to agency lenders to see which would provide the best terms.  Freddie Mac was more aggressive on the underwriting and was able to fund an acceptable loan at a low interest rate.  Therefore, the borrower was able to obtain a long-term fixed-rate nonrecourse loan while securing long-term financing and buying out his partners.

     We were able to provide construction financing and long-term financing to this client, and gave him the cash he needed to achieve his goals.” said Angela Kesselman, TMG’s associate director of Finance.  “This is his first multifamily project, and we were there to assist him all the way through the process.

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.

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Financing for MHP's with park owned units

The Madison Group Arranges $5,800,000 loan for the purchase of a Mobile Home Park

Tags: MHP financing, park owned homes,
Friday, Apr 27, 2018
by Angela Kesselman

The Madison Group (TMG), a leading source of mobile home park financing nationwide, arranged the $8,000,000 purchase of a mobile home community in Oklahoma.  The parks income was largely derived from park owned units.  TMG secured the financing with a 5-year fixed rate of 5.5% with a 7 year term and one year of interest only payments and a 25-year amortization at 77% loan-to-value.

     The property, which is located in a nice residential area and has good access to the freeway, is fully occupied.
The only current vacancies are empty lots.  The mobile home park consists of 200 lots on 35 acres.  The park owns 160 homes of which 34 are lease-to-own units. The borrower needed to accommodate an IRS 1031 tax-deferred exchange on another park that was sold in Tulsa. This purchase met the borrower’s goals.

      Some challenges TMG faced in securing this finance package include the fact that parks with more than 35% of the homes owned by the park are more difficult to finance.  This park also had declining income due to earlier poor management and increased collections.  Additionally, the client lives out of state, but has been very successful in this market with another park.

     The Madison Group was able to secure financing through a regional bank that was comfortable lending on the park and the operations as a whole.  The borrower is very experienced with this property type and owns a large portfolio of parks. 

     We were able to work with the right lender and third parties to get this loan closed within the 1031 timeline.  We were also able to secure a high LTV loan for the client.” said Angela Kesselman, TMG’s associate director of Finance.

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

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