A 12-unit walk-up in East Boston, half occupied at heavily under-market rents. Asking $2.8M with $400K of needed renovations to bring all units to market. Stabilized NOI projected at $245K (vs. current $138K).
BRIDGE LOAN AMOUNT
$2,240,000
Stabilized agency financing wouldn't fund until rents were up - but rents couldn't be raised until renovations were complete, and renovations needed capital that wasn't there. Classic value-add chicken-and-egg.
Adler Capital structured a $2,240,000 bridge with $400K of rehab draws, 24-month term, no prepay. Investor renovated 8 units in 14 months, raised rents to market, then refinanced into a stabilized multifamily DSCR at 5.85% on the new $3.4M valuation.
The Outcome
Stabilized in 14 months, refinanced in month 16. Investor pulled $310K of equity at refinance to fund the next East Boston deal. NOI increased 78% from in-place to stabilized. Adler Capital now financing his fourth Boston multifamily.
Deal Highlights
BRIDGE LOAN AMOUNT
$2,240,000
PURCHASE PRICE
$2,800,000
REHAB BUDGET
$400,000
TERM
24 Months
STABILIZED VALUE
$3,400,000
TAKE-OUT RATE
5.85% DSCR
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