Case Study

Case Study: Tampa, FL

Property Details:
Square Foot: 5505
Year Built: 1947
Style: Contemporary
Beds/Baths: 6 beds, 4 baths
Garage: 2-car detached
Lot size: 99 x 266

Situation
The owner had a total outstanding debt of $1,485,000. The current market value (CMV) on the property was $950,000. The owner was not in default and had a 700 credit score. The owner was professionally relocated and was unable to sell the house and decided to rent the property. Since current rents don’t support the debt service payment, the owner desired to reduce the principal and debt service so as to cash flow with the rental income. Additionally, the owner desired to position the property to sell to the tenant in 12 months.

Objective
Purchase the existing loan at a discount for cash, restructure the owner’s debt and provide long-term conventional financing for a take-out while not damaging the owner’s credit. Drastically lower the principal balance and debt service.

Solution
The current lender would only accept $680,000 for the note. Fund $580,000 and the owner contributes $100,000 in personal funds. Modify the debt from $1,485,000 down to $760,000. Assist in obtaining a take-out lender at 80% LTV for a successful refinance 9 days after the note purchase for a total principle reduction of $725,000.