RESIDENTIAL
Case Study #4:
Birmingham, MI
Property Details: Square Foot: 3748, 1640-sqft
fin. basement
Year Built: 2000
Style: Colonial
Beds/Baths: 3 beds, 4.2 baths
Garage: 3-car detached
Lot size: 65 x 130
Situation The owner had a total outstanding debt of $1,200,000. The current market value (CMV) on the property was $1,050,000. The owner was not in default and had a 700 credit score. The owner did not want to move or damage her credit but wanted to improve the negative equity position.
Objective Purchase the existing loan at a discount for cash, restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit.
Solution Negotiate and purchase the loan for $700,000 after which time, modify the owner's debt from $1,200,000 down to $800,000. Assist in obtaining a take out lender at 80% LTV for a successful refinance 14 days after the note purchase.
Case Study #12
Hartford, CT
Property Details: Square Foot: 4620,
1791 sqft fin basement
Year Built: 1964
Style: Colonial
Beds/Baths: 5 beds, 2.2 baths
Garage: 3-car attached
Lot size: 1.64 acres
Situation The owner had three liens with the same lender for a total outstanding debt of $920,000. The current market value (CMV) on the property was $850,000. The owner was three months in default and had a 600 credit score. The default was strategic because the owner didn't believe he would recover his equity loss within the next three years. In addition, the owner had a free and clear rental property valued at $300,000.
Objective Purchase the existing loan at a discount for cash, restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit, and drastically lower his principal balance and debt service.
Solution Negotiate and purchase all three liens for $573,000, after which, restructure the owner's debt from $920,000 down to $637,000. Institute a one year bridge loan at 12% interest only. Assist in repairing the owner's credit, and after eight months, the owner secures a conventional takeout loan.
