Opportunity Funding - Bridge Loans - Hard Money

Catalina Mortgage has a variety of funds providing bridge loans for a wide range of interim financing needs:

• Your bank has just offered you a discount if you can pay them off quickly?
• You have the opportunity to acquire a property for a really good discount?
• Your property is under-performing and needs time to re-stabilize?
• There are just no lenders today for your loan that matured?
• Your bank has just closed you bank lines?
• You are facing foreclosure - or need to get out of bankruptcy?

For these and more, the solution is an interim bridge loan.

I know - they are expensive, but if the opportunity or need is worth more than the cost, it is a good business decision.

Take an real example - our borrower owed $14,000,000 on performing retain center. The bank had to get the loan off the books and offered a 50% discount. We put on a bridge loan and the 5 points and 12% interest didn't seem bad to pick up $7,000,000 real equity.

Another example is a client who needed some working capital to complete tenant improvements for a new tenant in his shopping center. Even though he owner another property free and clear and had good credit, none of the commercial banks were open to providing the necessary financing. A two year bridge loan quickly provided the funds for the tenant improvements and get the tenant in in time.

If you have a need - call or email.

Cliff DuBois
cdubois@catalinamortgage.com
(800) 757 - 0265

We always appreciat the opportunity.

Discounted Note Payoff

DPO - Discounted Loan Payoff - (some notes)

There are several scenarios where you may be offered a discount to pay off your current commercial real estate loan:

1. Your current loan is maturing and the debt is more than can be refinanced.
2. The current lender has some outside pressure to reduce their CRE exposure.
3. Your property is no able to service the debt.

All the above assume that either the loan is non-recourse (so you don't HAVE to put additional cash into the property), or you do not have additional capital to contribute - and you can't raise new equity with the current level of financing.

Scenarios will vary a lot depending on the specific lender and loan servicer, but in general it should be (should be) an honest and logical assessment of the options available to the lender. If the best option to minimize the loss to the lender is to offer a discounted payoff, then there is a good chance you will get that option - and you will probably have to move quickly.

Don't expect that another conventional lender will want to step in and finance a payoff that just caused a loss to another lender. You will almost always need to use a bridge loan (Hard or Semi Hard Money) to provide some distance between the payoff and the ultimate conventional refinance.

UNDERSTAND THAT ALMOST EVERYONE WILL CONSIDER THE DISCOUNTED PRICE AS YOUR NEW BASIS. Don't expect that you will convince someone to lend you 100% of the payoff "because the value of the real estate is so much higher" - The payoff is the new "cost. That means you will need to put fresh cash into the transaction and that can range from 15% on really strong transactions to 50% on weaker transactions.

Also - just because you have a discount that is way below replacement cost (or what you originally paid), you will need a realistic and viable exit strategy.

Last Note - evaluate your discount very carefully. Some properties will never make sense, and a lot of discounts are still over-valued considering the risks of the market and specific real estate. Don't be afraid to walk away from a bad deal.

I hope these notes help and we have a number of programs to hale take advantage of properly structured discounted payoffs or acquisitions of REO.

Cliff DuBois
cdubois@catalinamortgage.com