Today's LIBOR Rates
1 M |
0.31563 |
 |
3 M |
0.47500 |
|
6 M |
0.68794 |
|
1 YR |
1.06438 |
|
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LIBOR Loan Case Study #169 |
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May 28, 2009
Borrower Profile:
• Foreign National, Single Female Investor, Special Situation
• No monthly income in USA
• $17.5 million in high end San Francisco properties
• Needs $10.5 million in first loan payoffs and cash for improvement
• LIBOR loan: 24-month note based on 1-Year LIBOR
Main Benefit:
• Using LIBOR loan to manage cash flow and repair credit after BK
Customer is a 30 year investor client who concentrates on SF Bay Area realty. She parlayed her 30 single family resident properties (largely conforming) into four prime pieces of real estate (three SFR’s and a restaurant). She was forced into Chapter 7 asset protection after being victimized by an international Ponzi scheme. Without any debt aside from her mortgages, she falls into a grey area in lending, as she can demonstrate that her Chapter 7 was a calculated effort to save her wealth and not to burden the community with another freeloader.
Our borrower came to us to secure a $10.5 million blanket loan to cover the four properties in her REO schedule. Her note needed to be a greater term than 18 months, so we’re working with the investor to make that happen. Once she clears the BK issues out via this refinance, she will begin rebuilding her liquidity base via commercial redevelopment of several of her properties. Each property is a jewel – one in North Beach, one in the Heights, one near the Presidio. She needs to be able to hang on to these properties until our market rebounds.
The option we brought in for our investor is a 24-month note based on the 1 YR LIBOR. The fully indexed rate is 1YR LIBOR (2.01%) + 8% = 10.01%, and a payment of $87,587.50. We have a live deal here folks! We’ve got a 1 year interest reserve and a 1 year prepay in place. This story is not about CASH FLOW, per se; it’s about doing what you need to do when you need to. LIBOR loans can help.
The moral of the story: don't get hung up at the conventional banks. Choose a mortgage planner (or two) that has connections to investment banking and commercial lending institutions that understand the need for special case individuals to manage their wealth building via timely and appropriate mortgage products. This is the power of LIBORATION.
Jack Williams divides his time between family and business in ever-changing proportional balance. In between changing twins' diapers, and reading Ferdinand and Good Night Moon, he is originating and facilitating funding for LIBORATED people. Jack can be contacted in care of gotrates.net.