CaribbeanMortgageLoans.com
"Mortgages For Real Estate In The US, Canada, Mexico, The Caribbean & The World"
CaribbeanMortgageLoans.com
"Mortgages For Real Estate In The US, Canada, Mexico, The Caribbean & The World"
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Syndicated Loan Scenario We work directly with an SEC Registered Investment Advisor and commercial mortgage brokerage/banking firm, that sponsors several direct participation commercial real estate construction and development loans as the sole means of financing viable and profitable real estate development projects. They use the business model and processes of real estate syndication as a means of reducing investor risk by dividing one commercial real estate loan among multiple participating investors. Here is a Typical Commercial Real Estate Loan Investment Scenario: Our Investment Advisor Partner has originated a commercial real estate loan for a 180 unit multifamily development and construction projects that will be worth $15,000,000 in market value upon its completion. They structure the loan at 80% loan-to-value (LTV) ratio, a debt loan amount of $12,000,000 has been determined. Adding typical mortgage banking fees and closing costs, we arrive at a final gross loan amount of $12,605,000. In a "single-investor" commercial mortgage investment transaction, taking place in today's market, an institutional investor might not be comfortable with the loan-to-value ratio of 80%, but may be incentivized to do so because of the high interest rate that the borrower is willing to pay, just to get their project financed. However, an institutional investor will have much more incentive, along with an elevated comfort level to invest in the project when presented with the opportunity to participate in the loan with a few other investors. Therefore, our Partner would structure the entire $12,605,000 loan as a participating commercial mortgage investment to be divided into 50 equal "commercial mortgage shares". Primarily for corporate and institutional investment, each mortgage share would be sold for $252,100 thereby enabling us to fully fund the project. The result is "win / win" because the borrower obtains funding for his project and each of the 50 investors get to fund a "share" of this project with a greatly reduced level of risk and greater level of comfort. As you can see, the risk is shared amongst 50 Investors instead of just one or two which would make the transaction much more difficult, if not impossible to fund under current capital market conditions. |
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