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Residential Case Studies Case Study #4: Birmingham, MI Property Details Square Foot: 3748, 1640-sqft fin. basement Year Built: 2000 Style: Colonial Beds/Baths: 3 beds, 4.2 baths Garage: 3-car detached Lot size: 65 x 130 Situation The owner had a total outstanding debt of $1,200,000. The current market value (CMV) on the property was $1,050,000. The owner was not in default and had a 700 credit score. The owner did not want to move or damage her credit but wanted to improve the negative equity position. Objective Purchase the existing loan at a discount for cash, restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit. Solution Negotiate and purchase the loan for $700,000 after which time, modify the owner's debt from $1,200,000 down to $800,000. Assist in obtaining a take out lender at 80% LTV for a successful refinance 14 days after the note purchase.  Case Study #26: Seattle, WA Property Details Square Foot: 6866, 2914-sqft fin basement Year Built: 2004 Style: Colonial Beds/Baths: 6 beds, 6 .2 baths Garage: 3-car detached Lot size: 96 x 250 Situation The owner had a total outstanding debt of $2,700,000. The current market value (CMV) on the property was $2,300,000. The owner was not in default and had a 760 credit score. The owner was downsized and realized a substantial decrease in income. He did not want to move or damage his credit but could no longer sustain his current debt service on the loan and desired a lower loan balance and payment. In addition the owner owed $43,000 in outstanding property taxes. Objective Purchase the existing loan at a discount for cash; restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit; drastically lower his principal balance and debt service; and bring property taxes current. Solution The owner pays $43,000 to bring the taxes current. Negotiate and purchase the loan for $1,552,500 after which time, restructure the owner's debt from $2,700,000 down to $1,725,000. Assist in obtaining a 30-year fixed take out loan at 5.5%. The owner realizes an overall 36% debt reduction. Case Study #17: Tampa, FL Property Details Square Foot: 5505 Year Built: 1947 Style: Contemporary Beds/Baths: 6 beds, 4 baths Garage: 2-car detached Lot size: 99 x 266 Situation The owner had a total outstanding debt of $1,485,000. The current market value (CMV) on the property was $950,000. The owner was not in default and had a 700 credit score. The owner was professionally relocated and was unable to sell the house and decided to rent the property. Since current rentals don't support the debt service payment, the owner wanted to reduce the principal and debt service in order to create positive cash flow with the rental income. Additionally, the owner wanted to position the property to sell to the tenant in twelve months. Objective Purchase the existing loan at a discount for cash, restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit, and drastically lower his principal balance and debt service. Solution The current lender would only accept $680,000 for the note. Fund $580,000 and the owner contributes $100,000 in personal funds. Modify the debt from $1,485,000 down to $760,000. Assist in obtaining a take out lender at 80% LTV for a successful refinance nine days after the note purchase for a total principle reduction of $725,000. Case Study #12: Hartford, CT Property Details Square Foot: 4620, 1791 sqft fin basement Year Built: 1964 Style: Colonial Beds/Baths: 5 beds, 2.2 baths Garage: 3-car attached Lot size: 1.64 acres Situation The owner had three liens with the same lender for a total outstanding debt of $920,000. The current market value (CMV) on the property was $850,000. The owner was three months in default and had a 600 credit score. The default was strategic because the owner didn't believe he would recover his equity loss within the next three years. In addition, the owner had a free and clear rental property valued at $300,000. Objective Purchase the existing loan at a discount for cash, restructure the owner's debt and provide long-term conventional financing for a take-out while not damaging the owner's credit, and drastically lower his principal balance and debt service. Solution Negotiate and purchase all three liens for $573,000, after which, restructure the owner's debt from $920,000 down to $637,000. Institute a one year bridge loan at 12% interest only. Assist in repairing the owner's credit, and after eight months, the owner secures a conventional takeout loan. We Respect Our Clients Confidentiality. MFG Capital Group has policies in place which are designed to maintain the confidentiality of your workout or restructuring transaction. Because of this we do not release the names, contact information, or property addresses of our clients. Critical details which may be used to determine who a property owner is have been changed on this site and in other materials provided by MFG Capital Group. Because of this all photos and or images used on this site are representative rather than actual photographs. |
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