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Hello Everyone!
This is my story on how equity financing if properly executed will save your deal. We normally don't fund residential equity deals as we did a few years ago. However, when I got a call earlier this year from a desperate LA Realtor who found us on Activerain, she told me we were the "Last of the Mohicans" to her. Well, I had to hear her out being I've seen the movie at least half a dozen times. Let's see what her story was about. Keep in mind, we get a tremendous amount of call volume from buyers of both commercial and residential properties wanting us to provide them with 100% financing of which we're able to help over 90% of them. Therefore, this call was no different than others with exception to the movie drama that was about to unfold.
The property was on the market for over one hundred days with several price reductions. The latest and perhaps the last reduction before she was due to lose her listing was $2.8MIL. I felt bad for her for she worked so hard to get the listing and now she was about to lose it. The only hope she had was a previous buyer who was qualified to purchase at that price level, but at a 80% LTV loan approval, was unable to come up with the necessary amount of equity capital money to close the deal. I could see the deal falling apart on one hand and coming together on the other. I asked her a simple question. Did she have 100% faith in what we do and if she did, she must let me take full control of the deal from start to finish. At this point, there really was no other choice, but I gave her that option. She whole heartedly agreed and filled me on the details of the transaction.
If you need equity infusion, make sure you got enought equity to get the deal done! Everything I needed to know was clear as day. Here you have a property with approximately $700K in equity, a buyer who qualifies, but is way short of the downpayment needed and a seller who after conversing with him is open to just about anything to get the property sold. I'm not talking about a run down property, but a totally renovated residence that was purchased at the right price allowing the seller ample margin for high end remodeling. A few simple clicks on the EquiFund Calculator gave me the information I needed. This deal was a piece of cake! I sent the EquiFund scenario to both buyer, seller and Realtor and explained to them the mechanics of the Program. The numbers spoke for themselves. All parties agreed to restructure the purchase contract at its full appraised value of $3.5MIL. The only stipulations to getting the deal done were the buyer's broker had to sign up for the Program, invest in the EquiFund Calculator and get training, both parties needed to purchase EquiFund bank accounts and a participating PSA had to close the deal. It was that simple!
If you remain positive even when it is mostly likely impossible. then you shall succeed. I have to admit. I have originated all kinds of commercial and residential loans from coast to coast, from $500K to $32MIL, but this one was by far the easiest EquiFund transaction on record. It closed in twenty one days with everyone in disbelief that it could be done. Since then, the Realtor has become an EquiFund Realtor engaging in commercial transactions in addition to her thriving residential business. She is a true believer in the EquiFund Program, the new school of doing business. The seller has recently used equity financing in three other remodeling projects selling his properties within six to eight weeks of listing them. The EquiFund Broker has originated and closed over a dozen luxury properties, each one of them with equity financing included ranging from 5-20% of their appraised values. This was definitely a win/win situation. It was my pleasure to help out these folks and make it happen for all of them, especially the Realtor who was paid her FULL commission off of the purchase price at maximum appraised value. I have to say only one thing about all of this. Thank God I watched "The Last of the Mohicans", for it truly has been an adventure.
Richard David
Bancofino, LLC
richard@bancofino.com
100% Commercial Financing • Investment Advisors • Nationwide Lending • Equity Financing
An Affliate of Federal Funding, LLC
www.equifund.us
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