Funding Purpose
Tauro Capital Advisors was engaged on an exclusive basis to place debt for the construction of 14 modular SFR homes in Eagle Rock, CA.
Property Description
The hillside lots are on one of the last undeveloped tracts in the neighborhood. The neighborhood is near major LA hotspots. 10 – 14k SF lots with great views.
Sponsors
The sponsors are experienced owners and developers who have formed a partnership and done several other similar projects in nearby areas.
Challenges
- The sponsor was looking for max leverage and had limited equity.
- Modular structures being manufactured off-site, collaterization was problematic.
Solutions
- Funding secured with a debt fund that specializes in construction loans.
- Combined, they saw that the sponsors have enough experience to bring this to fruition.
Funding
- Loan Amount (LTC): $16,880,000 (85%)
- Interest Rate: 7.99%
- Term: 1.5 years
- Recourse: Payment guarantee
- Interest Only: 18 months
- Prepayment: No penalty
