In one of ReProp’s recent successes, our team initiated the loan to a gas station purchaser, not for the full price of the gas station, but to buy out an inheritance interest in the property/business. This allows a traditional bank loan to be subsequently completed for the balance required to purchase in full.
In the case of the gas station, revenue would begin to accrue to the borrower/purchaser as soon as they legally took title to the property/business. This process underwrites the urgency of hurdling that initial step of eliminating the inheritance interest.
In almost all of our recent bridge loans of this nature, the short term has been 24 months or less, interest free, and the loan rate has been in the vicinity of 10%. That may not be the lowest rate available anywhere – compared with a long-term secured bank loan, for instance, but then again it might be if the borrower’s credit is less than impeccable. In any case, the availability of funds quickly and readily is, as they say, priceless. Providing the opportunity for buyers from underserved sectors to take advantage of the opportunities they encounter and choose to pursue is what makes our team here at ReProp essential in the expansion of the real estate investment market.