Summary: The Madison
Group (TMG), a leading national lending source of RV Park financing arranged 3
loans in Utah totaling $6,500,000. Two of the RV Parks were purchases and qualified
through SBA 504 loans and the other was a cash out refinance of an existing RV
Park.
The borrower’s goals were to cash out his existing RV park
and buy two other parks with SBA financing.
The three RV parks are in good locations near national and state
parks. Both purchase loans had a hard
deadline and needed to be closed and funded by the end of the year. TMG worked
closely with the lender and the borrower to meet the deadlines for a successful
closing.
TMG provided a cash out refinance of one park at an LTV of
72% on a conventional loan with a 4% interest rate on a 25-year amortization
and a 10-year fixed term. This park has
been owned by the borrower for two years and he had greatly increased revenues
during ownership. He used this capital
to purchase the others two parks with 80% and 85% LTV SBA 504 loans,
respectively. TMG was able to facilitate money for capital improvements on the
higher leveraged park. The loan was slightly above the 85% purchase money
underwriting guideline and included a 3-month interest reserve to be used
during the slow season. Both SBA loans
were financed with 4% fixed rate financing on the first mortgages. The 2nd
mortgages will be securitized at a rate in the mid 2s for 25 years. In addition, they may both qualify for the
SBA Covid stimulus providing no payments for 6 months.
The Madison Group provided the critical piece of the puzzle
by providing a cash out loan on the existing park. This access to equity enabled
the client to purchase two more assets and grow his portfolio threefold.
Location: Utah
Property: 3 KOA RV
Parks
Loan Amount: Combined for a total of $ 6.5M
Interest Rate: 4% on bank loans, mid 2’s on 2nd
mortgages
Term: 25 Years
Amortization: 25 Years
Prepayment: None on
first mortgages, 10 year declining on SBA
LTV: 72% cash out on
conventional loan, 80 and 85% on the SBA transactions