Core Plus — Heron Lake, Columbia, SC
We were retained by a client that was purchasing a property in Columbia, SC with in-place HUD financing that had to be assumed, and wasn’t the most favorable to the deal given the long-term nature of the loan, and the inability to “cash out” upon any value creation via a traditional refinance or supplemental loan, while simultaneously being too cost prohibitive to pay off when acquiring the deal. Suffice it to say, challenging debt often makes it nearly impossible to attract quality equity; however, our client owned other assets in the immediate area, and felt that despite “bad” debt being assumed, the overall basis was good, and there was a sufficient long-term upside in the deal, and so he insisted on purchasing the property and having us secure the equity for him.
Within days of coming to market, we identified a family office with a timely 1031 that was the perfect fit, and that didn’t mind the cost of paying off the HUD loan as the new debt structure would better align with their 1031 needs, and further give them the ability to almost fully “cash out” their equity investment upon execution of a light value-add program our client had planned, and thus preferred to be in a short-term loan instead of the long- term in-place HUD loan. Within a week of initial contact, the deal was signed up, and closed within 30 days to accommodate the 1031 investors timing, who ultimately invested $11,500,000 into the deal.