A Somerville investor found a classic 3-family in the Union Square neighborhood - $1,480,000 purchase, rents at $2,600/unit vs market of $3,200+. Below-market leases were expiring within 12 months.
LOAN AMOUNT
$1,184,000
The deal's upside was entirely in the rent rollover - current cash flow barely covered debt service. Needed a bridge lender comfortable with the below-market income and a plan for lease rollovers.
Adler Capital structured a $1,184,000 bridge loan at 80% LTV in 18 days - underwritten to market rents, not current in-place rents. 18-month term to allow full lease rollover.
The Outcome
All three leases rolled over within 14 months. New rents: $3,200/unit = $9,600/month gross. Refinanced into a DSCR loan at stabilized value of $1,720,000 - no cash out of pocket.
Deal Highlights
LOAN AMOUNT
$1,184,000
PURCHASE PRICE
$1,480,000
CURRENT RENT
$7,800/mo
MARKET RENT
$9,600/mo
LTV
80%
CLOSING TIME
18 Days
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