Multifamily Cash-Out Refinance – Phoenix, AZ
- Capital Source: Fannie Mae
- Purpose of Loan: Cash-Out Refinance
- Loan Amount: $6,500,000
- LTV: 65%
- Rate: 3.04%
- Term: 10 Years
- Amortization: 30 Years
- Interest Only: 5 Years
- Prepayment: 9.5 Years Yield Maintenance
- Recourse: Non-Recourse
Tower Capital has refinanced an 80-unit multifamily property located in northcentral Phoenix. The garden-style, mid-80’s vintage property was acquired by the borrower in 2017, who has since completed a number of capital improvements to the property. These include renovating approximately 50% of the units, installing new signage, enhanced lighting, and upgrades to building mechanical systems. The borrower’s efforts have resulted in a 33% increase in rental income.
The 65% LTV, non-recourse loan provides the borrower with a 3.04% interest rate, fixed for ten years. The loan offers five years of interest-only payments, followed by a 30-year amortization schedule.
The current COVID-19 pandemic has caused most lenders, including the agencies, to become more conservative with their underwriting and cash-out requests. In order to maximize the best loan terms for the borrower, LTV was capped at 65%, which provided lower pricing, additional years on interest only payments, and reduced COVID-related debt service reserve holdbacks. Through a pro-active approach, Tower worked closely with the appraiser and the lender’s underwriting team in order to maximize underwritten NOI and value for the property, which led to a significant cash out to the borrower.
About Tower Capital:
Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind.
Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. We specialize in debt and equity placement ranging from $2 Million to $100 Million and have financed over $1 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.