Success Stories
With 36 years of continuous lending history, Montegra has many success stories to tell. Let us share some of our recent loan stories with you to see how our loans have helped borrowers achieve what they needed to do with minimum red tape and the speed, flexibility and affordable pricing that set Montegra apart form its competitors.
Resort Area Loans
WHY THE BORROWER NEEDED A HARD MONEY LOAN
A “below market purchase” deal
The borrower purchased a high-end condo in a premier Colorado Ski resort at a special pre-construction bargain price. His purchase cost was $3,480,000. He made an earnest money down payment of $385,000 to hold the units until completion. When the project was completed (18 months later), similar units to this one were selling for $4,500,000.
Our borrower wanted the maximum leverage possible to complete this purchase. However, when he went to his bank (and other institutional lenders), they all told him that they could only lend against the $3,480,000 purchase price instead of the $4,557,000 current appraised value. Their maximum loan amount at 80% LTV was $2,784,000. In other words, they penalized him for getting a good deal.
HOW MONTEGRA HELPED THE BORROWER
Montegra was willing to use the higher of appraised value or purchase price and funded a 65% loan to appraised value of $2,975,000. This was $191,000 higher than the institutional offers. Our borrower used Montegra’s loan to close the property with the smallest possible cash down payment and the greatest possible leverage.
Land Loans
WHY THE BORROWER NEEDED A HARD MONEY LOAN
Land rich but cash poor
Our borrower owned a 38-acre land parcel zoned residential near Aspen, CO. He had an existing bank loan on his property; however, because of a lack of documented cash flow, the bank refused to renew its loan and threatened foreclosure. With no verifiable source of cash flow, the borrower turned to Montegra.
HOW MONTEGRA HELPED THE BORROWER
Montegra used its asset based underwriting approach to analyze this loan request and go where banks and institutional lenders did not want to go. The property appraised for $4,000,000. Montegra funded a $2,125,000 first mortgage loan (53% LTV) for a one-year term. Our loan included an interest reserve sufficient to pay all the interest for the full one year term without any out of pocket payments from the borrower. The borrower was now able to list and market the property with a one-year time frame in which to find a buyer. This is another way in which Montegra’s flexible loan structure is able to design and fund loans for each individual situation.
Industrial and Warehouse Loans
A very good building meets very bad credit
WHY THE BORROWER NEEDED A HARD MONEY LOAN
The borrower’s company owned a 40,000 square foot office warehouse property on 3.5 acres of land. The borrower was under pressure to re-finance a purchase money loan and also wanted to take some cash out. However, the borrower’s credit score (he would have to guarantee the loan) was in the low 500s. He showed some judgments, tax liens, and many slow pays. No bank or institutional lender would deal with this kind of credit history.
HOW MONTEGRA HELPED THE BORROWER
Using its creative asset based underwriting guidelines, Montegra was able to fund a $650,000 first mortgage cash out refinance loan on this warehouse. The loan was funded at 60% loan to value for a three-year term. Another example of Montegra providing the borrower what they need – when the need it.
Non-Recourse (no personal guarantee) Loans
WHY THE BORROWER NEEDED A HARD MONEY LOAN
A family quarrel over who has to guarantee the loan
A family limited partnership owned a valuable fully leased warehouse in Aurora, CO. However, one of the partners insisted on being bought out immediately and the limited partnership needed to raise funds to get this done. Their bank required a personal guarantee. The General Partner only owned 20% of the partnership and was not willing to personally guarantee the entire loan. No personal guarantee, no bank loan. How can this issue be solved?
HOW MONTEGRA HELPED THE BORROWER
With a conservative loan to value, Montegra was willing to fund a two-year interest only loan within a few weeks after receiving the loan application. With sufficient funds to buy out the recalcitrant partner in a timely way, the family was able to resolve their differences and construct a new business plan that allowed them to obtain conventional financing after a one year time frame.
Improved Property Loans
Fund a loan on a property with an IRS tax lien – you must be crazy
WHY THE BORROWER NEEDED A HARD MONEY LOAN
The borrower owned a single tenant mansion in Denver. The single tenant was having difficulty paying rent, and the IRS was about to foreclose a tax lien on the property. The borrower needed to pay off his existing loan and raise enough cash out to pay off the IRS and get a little breathing room until he was able to restructure his leases on the property. He went to his bank and they just said “no”. Given the existing circumstances, who could blame them? This was not a bank deal.
HOW MONTEGRA HELPED THE BORROWER
Montegra can sometimes tread where banks fear to go and funded a $650,000 two year interest only loan on this property at a 65% LTV. This story had a happy ending for the borrower since he was able to get paying tenants in the building, pay off the IRS, and then sell the property to an investor.
Montegra’s creative loan structuring, combined with its asset based underwriting, can mean the difference between getting the job done or losing the property for borrowers in difficult situations.
Purchase Contract At Under Fair Market Value Loans
From tenant to owner thanks to Montegra
WHY THE BORROWER USED A HARD MONEY LENDER
Our borrower came to us to help him purchase the warehouse in which he was a tenant. He had a lease/option to buy the property at below market value because his lease rate (which was locked in for another four years) was at a below market rate. Traditional lenders would not recognize that the building, leased up at market rates, had a value higher than our borrower’s option price. How can he get the funds to make this deal happen?
HOW MONTEGRA WAS ABLE TO HELP THE BORROWER
Montegra recognized that when the tenant exercised his option to buy the building (assuming he could get funding) that he could then cancel the lease with himself and re-lease the building at market rates. Because the property leased at market rates was worth much more than it was as currently leased, Montegra agreed to use the higher of appraised value or purchase price – the opposite of what banks and institutional lenders typically do.
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