Challenge

A returning borrower came to Grand Pacific to purchase a 1,650 SF SFR and renovate to a 3,950 SF SFR.

• Sponsor was light on liquidity for this project
• Required a higher leverage than what our construction loan could offer
• Appraisal value was lower than borrower’s expected sale price
• Appraised value raised questions regarding the viability of the project

With our construction loan unable to provide the leverage necessary for the borrower, we looked at other means to fund this deal.

Solution

By understanding the constraints of this deal, we were able to fund a highly leveraged loan with minimal cash from the borrower.

• Provided additional equity to lower the burden on the borrower
• Borrower only needed to invest 5% of equity based on total cost
• Returning borrower with an established relationship and substantial development experience

Here at GP, we are constantly searching for new ways to bring value to investors through our loans.

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