The borrower is seeking an interest only, first position loan of $600,000 at 10% simple interest with a 36 month term on a 32 unit apartment complex located Mesa AZ. The value of the complex as outlined below is approximately 1,700,000 give the loan an LTV of 35.2%. The property was converted from a motel and caters to the retired senior offering fully furnished, all utilities included at a reasonable price, in an excellent location with beautiful amenities. A portion of the excess funds from this loan will be used to connect the park to city sewer and perform some deferred maintenance and to make some improvements to the property.

BORROWER BACKGROUND

The borrower has been purchasing and rehabbing C class single and multifamily properties in Phoenix, Mesa, Indiana, California and Mexico. At the moment they hold approximately 60 single family properties in Phoenix and have little leverage on any of the property.  They have in house repair and maintenance staff.  Over the past seven years this borrower has borrowed approximately $7MM from us and has a perfect payment history.

EXIT STRATEGY

The borrower has sufficient income and assets to qualify for conventional financing, however, being active in real estate prior to the crash means that their credit scores have suffered from foreclosures that are quite old. When his scores have sufficient time to recover, it is the borrower’s intention to place conventional financing on the subject property.

CONCLUSION OF VALUE

As indicated in the attached documents there is ample support for the subject’s property value to range from $1,500,000 to $1,750,000 based on a cap rate of the net operating income, which is validated against comparable sales in the last twelve months. Prices in the subject’s market area have fluctuated between $30-50,000/per door. I conclude that the property is reasonably valued compared to the other recent sales. The market value of the fee simple title to the subject property, as of March 24, 2017, is:

 $1,700,000

(ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS)