Case Studies: Capital Markets

Magnolia Run, Virginia Beach, VA

Bonaventure was engaged by a client with a HUD 221(d)(4) loan with an above market interest rate and low leverage. The client wanted to capitalize on historically low interest rates, and needed some assistance navigating through the HUD refinance process. Bonaventure successfully worked with the MAP lender to execute a refinance on the client’s behalf that allowed for over $4M in cash out proceeds while maintaining the same debt service.

Challenges

  • Maximize the cash out proceeds so the client could fund future development opportunities.
  • Client had a unique legal structure that required completion of credit check documentation and sign off of the “bad boy” carve outs from a previous partner with no current economic interest.
  • There were significant safety and ADA code compliance issues that required remediation by the lender.
  • Client had an extensive list of real estate holdings, but did not maintain a detailed schedule of the assets and existing debt required by the lender.
  • Client was missing a lot of information requested by the lender.

Solutions

  • Worked with the appraiser to increase the valuation by $2.45 Million, resulting in an additional $2M in loan proceeds.
  • Worked as a liaison between the client, the previous partner, and the lender to arrive at an agreeable solution for all parties.
  • Assisted the previous partner with completion of the onerous loan forms.
  • Coordinated over $200k in repairs prior to closing, to bring the property into compliance, which resulted in $2M not being held in escrow.
  • Provided the client with an REO template and assisted the client in tracking down the information required by the lender.
  • Tracked down a copy of the original closing binder, scanned in the documents, and returned the copy to the previous owner.