Refinance of Free Standing Restaurant in Los Angeles, CA
$1 million refinance for a free standing restaurant in Los Angeles, California. The restaurant, opened in the 1970s, has a history of stable cash flows and has been favorably reviewed by various local and national magazines. In addition to paying off the existing mortgage, the loan has a cash-out component to cover expenses for the construction of additional property improvements. Commercial mortgage broker Financial Compound was able to procure a 7-year fixed rate loan with 5.25% interest rate and 25 year amortization, 0.45% lender fee, about $10,000 of closing costs, a prepayment penalty of 5, 4, 3, 2, 1, 0, 0; and a 3 year extension option bringing the loan to 10 year fixed rate. Interestingly, the borrower is slightly encroaching on the neighbor’s property and the title report has a Notice of Substandard Property listed as an exception to title insurance. Financial Compound was able to resolve this title issue by structuring a requirement for the borrower to complete this work out of the first “cash out” proceeds.