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Residential / Small
Commercial Loan
Department
The Residential/Small
Commercial Loan
Department has been in
existence since 1997.
Since inception, the
department has been led
by Kim Hubbard.
The department offers
1-4 Family Residential
Loans,
Multi Family Residential
Loans and
Other Small Commercial
Loans.
The Company is well
known in the Denver and
Phoenix markets and has
a growing reputation in
the Salt Lake City and
Albuquerque markets as a
specialist in
Fix and Flip Loans.
The Company's 1-4
Residential Loan
offerings consist of
short-term loans
(typically one year or
less) for the
acquisition,
improvement, and sale or
refinance of properties,
known as
Fix and Flip Loans.
These loans are used by
both fix and flip and
fix and hold real estate
investors. This product
is for nonowner-occupied
investment purpose
properties only.
There is a wide spectrum
of property types and
conditions that
Merchants finances
through its
Fix and Flip Loans.
Many of the 1-4 family
residential properties
that investors find
suitable for
Fix and Flip Loans
are bank or HUD owned,
pre-foreclosures, estate
sales or other
distressed sale
situations.
Merchants has the
experience with and
capability of lending on
properties that are in
these situations,
whereas most traditional
lenders do not.
Many of the properties
financed by Merchants
require only cosmetic
rehabilitation, and some
even require no
renovation and are
simply "flips".
However,
many properties financed
by Merchants do not
qualify for conventional
financing because they
are considered to be
"uninhabitable" by
conventional lending
standards. For
example, perhaps the
furnace is missing, or
the kitchen and/or
bathrooms are "missing"
because the previous
owner removed appliances
and fixtures, or did
damage to the property.
These are just a few
examples of the property
conditions that
Merchants has been able
to finance.
Merchants is also
capable of financing
major construction and
renovation.
Depending on the extent
of the construction, the
Residential/Small
Commercial Department
may refer the loan to,
or work in conjunction
with, the Company's
Commercial Loan
Department to
be underwritten as a
Construction Loan.
These situations
include, but are not
limited to, "pop-tops"
where the existing roof
of the property is to be
removed and a second
story is to be built on,
"scrape" properties,
where the existing
property is to be
removed and a new
structure is to be
built, additions to the
existing structure,
"gutting" and complete
renovation, and in some
cases, structural
renovations.
If the renovations are
more extensive, the
borrower is typically a
seasoned rehabilitation
property investor, a
tradesperson, or is
working with qualified
construction
professionals.
Contact us
for more
information
on our
Fix and Flip
Loans.
Multi-Family Residential
Loans
Multi-Family Residential
Loans consist of
short-term loans secured
by apartments or
condominiums with 5 or
more units. The
borrowers often need
interim financing either
because: (1) they
are purchasing or
refinancing a
multiple-unit property
in order to rehabilitate
and convert apartments
to condominiums for sale
(Fix
and Flip Loans)
or, (2) they are
purchasing an apartment
complex and plan to
improve the property,
lease the units at a
higher rental rate, and
either sell the property
or hold for long term
investment (in which
case they would seek
long term financing once
the improvements are
complete) (Small
Commercial Loans).
Contact us
for more information on
our Multi-Family
Residential Loans Loans.
Other
Small Commercial Loans
Other
Small Commercial Loans
consist of short-term
loans on owner-use or
investor-owned
commercial property,
often in amounts of
$2,000,000 or less.
Larger commercial loans,
or commercial projects
that require extensive
renovation or
construction, are
sometimes handled by the
Company's
Commercial Loan
Department.
Small commercial
property loans include a
variety of collateral
types, such as small
office buildings,
warehouses, strip
shopping centers, and
land. The
borrower typically
needs interim (i.e.,
short-term) financing
until they can
rehabilitate and/or
stabilize the property
in order to refinance
with permanent financing
or sell for a profit.
For example, the
borrower may have
purchased the property
significantly under
market as a result of
the previous owner's
mismanagement.
But, despite the
property having a lot of
upside potential, the
borrower is unable to
secure long-term (i.e.,
conventional) financing
for the project because
the rents are currently
too low, or the vacancy
rate is too high, or the
debt-coverage ratio does
not meet traditional
standards, etc. In
these situations,
Merchants has often
successfully provided
interim financing
which then afforded the
borrower the time to
increase rental rates,
improve occupancy, or
increase debt coverage
ratios so that the
property may be sold for
a profit or refinanced
with permanent
financing.
Contact us
for more information on
our Small Commercial
Loans.
Contact Information for
Residential/Small
Commercial Loan
Department:
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