SPOTLIGHT LOANS
Commercial Loan Closed in Three Days (Fall of 2001)
Recently we received a call from an attorney representing a borrower. His client's deal was on the line. The borrower had $142,500 in down payment money, and seven days to complete a 1031 exchange purchase transaction, and she needed the money at a competitive rate. The property was a commercial lease property, located in a blue-collar area of North Portland. The borrower had worked with another lender, but at the last minute that lender was unable to deliver. We called one of our private investors and explained the situation. He agreed to fly to Portland the following day. We met him at the airport in the morning, and immediately left to inspect the property. Over lunch, we discussed the project, and by the end of the meal we had a firm commitment from our investor. We closed the loan through escrow two days later. This is the type of situation where private money is appropriate. We weighed the problems against the overall strength of the transaction, and moved decisively. If you have a deal on the line, and need an express loan make a call to Fairfield Financial Services.
Hard x 5 = Hard Money (Summer of 2001)
Fairfield Financial takes pride in doing loans that are said to be "difficult" for the most Lenders. Sometimes when we do a loan, there is a single difficulty factor and sometimes there are several. Recently we placed a loan that involved five difficulty factors. They were as follows:
- The property was being gifted to the son
- The son had poor credit history
- The son was not able to document income
- The property was a rural acreage (whereby the ratio of land value to total value was about 75%)
- The property was in generally poor condition
Based on the equity in the property, we arranged a cash-out loan for $110,000 to the son. This loan came to us through another loan Broker who had not been able to fund the loan using conventional or non-conforming sources. The Loan Broker was pleased to have a satisfied borrower, a sizable income check, and one less problem on his desk - all within less than three weeks from the time he originally contacted us. If you have a loan on your desk that appears to be "difficult", give us a call. We just might be able to help.
Land Owner Obtains Funding to Begin Development (Spring of 2001)
Fairfield Financial was recently approached by a banker who needed to borrow $150,000 against his equity on four separate raw land parcels at various locations in Oregon and Washington. The borrower had been attempting to arrange a loan on these parcels for nearly a year, and had reached a point where time had become a critical factor. The strong points of the loan proposal were immediately recognizable: we had a credible borrower, with a solid plan for developing these properties, and a clear exit strategy. The difficulties were also clear: we had four separate and varied pieces of land in two different states, and no obvious support for the borrower's claims regarding value. He had purchased the properties for under market value, so we could not apply a cost approach. No appraisals had been done on the properties, and there was not enough time to do them. The assessed values were not helpful, because in Washington there is no RMV, and the Oregon property had tax exemptions that lowered the value. Still, we felt that the borrower was making reasonable claims about value. Our solution: we personally visited and inspected each of the parcels; we checked with local Realtors to obtain information about comparable sales; and upon convincing ourselves that indeed there was sufficient value to support the proposed loan, we placed three separate private investors in loans totaling $150,000 on the four parcels. The loans were at 14% interest and allowed our borrower to quickly refinance without penalty, as his plan on two of the parcels involved a three-month exit. From the time we received a complete packet from the borrower, we had all loan commitments within six days, and had closed and funded all loans within two weeks. Obviously private money is not the correct solution for every problem, but when a private money solution does fit, it often fits very well - for it is fast and flexible, and most importantly, it involves the application of common sense.
Turn of Century Coastal View Home Remodeling Project Begins (Winter of 2000)
Fairfield Financial recently had the opportunity to work with a subcontractor who had been turned down by his bank for a remodeling loan. After a lengthy and tedious application process, he had been bluntly rejected because his documented income was too low. Next, he was referred to a low-income program, where after another lengthy and tedious process, he was told the opposite: that he made too much money. His Realtor, having heard about Fairfield Financial, suggested that he give us a call. Within 24 hours of his contacting Fairfield Financial, we had assessed the situation and were able to make a commitment to arrange financing for his project. Within three weeks he had his money and was moving rapidly forwardt. The loan was made as a combination equity loan of $55,000 and construction holdback of $55,000, with these holdback funds dedicated to completing the project. Upon completion of the project, the borrower expected to make a profit in the realm of $100,000. Once again, Fairfield Financial is helping individuals and businesses complete projects that don't fit the molds of the banks and institutions, but clearly make good sense.
Historic Building in South Bend, Washington to Get New Life (Fall of 2000)
Last month Fairfield Financial had the opportunity to loan money for the purchase of a historic hotel in the small coastal town of South Bend, Washington. Fairfield Financial arranged financing for 75% of the purchase price and the sellers took back a note for 25% of the purchase price. Fairfield Financial then arranged financing for another $50,000 for improvements to the hotel. Not only did Fairfield Financial make this loan happen, we have come to feel a strong sense of involvement in the community of South Bend, Washington. The property, located in downtown South Bend, Washington, could start a revitalization of the entire community. A revitalized historic hotel with charm and rustic features may be just what this logging town needs to evolve into a tourist attraction.
