Beverly Hills, CA -- (SBWIRE) -- 08/27/2014 -- Creating value amongst all stakeholders, especially investors and borrowers, has been a hallmark of United Security Funding’s (USF) success within the private lending arena. As one of Beverly Hills’ prominent bridge lenders, USF provides liquidity for owners of both commercial and residential real estate assets. Since its inception, USF has developed a particularly strong track record by engineering value added financial solutions for its borrowers with whom the company has enjoyed and continues to build longstanding relationships with. USF’s impressive performance can largely be attributable to its vast local knowledge and experience of the areas in which it lends, paired with the impeccable financial acumen of its principals who boast more than 45 combined years of experience in the industry.
USF is proud to announce yet another borrower success story. This particular transaction consisted of a $2.6 million loan secured against three (3) prime multifamily assets, totaling 45,000 square feet and spanning 46 units, all located within the heart of iconic West Hollywood.
Raising capital quickly was crucial to the borrower who urgently needed liquidity to take advantage of a discounted payoff on a business opportunity. Reluctant to “distress sell” any of his trophy properties without first allocating the proper marketing period necessary to divest them at fair market value, commercial real estate investor Ron New approached USF directly. New was confident that USF would take the time necessary to clearly understand the special circumstances under which he needed to raise this capital, and more importantly, to engineer the ideal capital structure both quickly and economically. USF did not disappoint, and much to New’s satisfaction, actually exceeded his expectations by successfully fulfilling his precise business needs through the design and implementation of a clever financial solution.
“We were comfortable working with New, as we had successfully worked with him before. More importantly, New was also confident to work with us, and entrusted us to deliver him an out of the box solution that would allow him to realize his discounted payoff opportunity. All of these were achieved on a very tight timeline, without New having to resort to a fire sale,” said William “Tripp” Nassour III, Managing Director of USF, who led the deal. Tripp also commented that “this goes the same for all transactions that we involve ourselves in. We only jump into an opportunity once we verify the legitimacy of our borrower’s business purpose and become confident with its prospects through justification from our swift yet intricate and comprehensive analysis. This ensures rapid processing times and certainty for our borrowers. As such, our investors also know that we always consider their best interests before diving into each deal.”
For this deal, USF designed a loan which required a relatively small monthly payment that translated to about 7% annually, and accrued the balance to the principal amount. Additionally, there were no upfront fees as USF incorporated all transaction costs such that they were to be realized only upon divestiture of the assets. This allowed ample time for the assets to be properly marketed and thereafter sold at competitive prices. The net result allowed the borrower to preserve cash flow. This was precisely what New had sought, and it meant that he was able to strategically utilize the financing so as to take full advantage of his discounted payoff opportunity. Resultantly, New was able to enjoy benefits that far outweighed its costs.
Also striking was the fact that the loan enabled New’s properties to be appraised at more than 20% higher in open markets than what USF had initially determined through its own internal analysis. “This increase in valuation exemplifies and validates both the positive effects that frequently derive from such financing, as well as USF’s underwriting, which is poised towards conservatism,” says Evan Frank, Managing Director of Operations at USF. “The underwriting process is something we take very seriously. Constant scrutiny ensures that USF never enters a deal without first establishing how it would recoup its investors’ money should a deal ever turns sour,” continued Evan.
USF’s deep knowledge in the West Hollywood multifamily submarket was critical to closing this transaction. “New’s properties were top notch, thus we were already comfortable with his collateral,” said Evan. “This particular deal was more highly levered than most of the traditional deals we do, so our knowledge of the area and the properties themselves were crucial to getting both our investors and ourselves comfortable so quickly.” USF did not shy away, instead it entered this deal “with utmost confidence in our underwriting,” and concluded that “participating in this deal would likely be an attractive risk-reward opportunity for our investors,” said Evan.
New also mentioned that “post financial crisis, the real estate landscape has changed drastically with numerous new measures and legislations being passed for the sole purpose of protecting both borrowers and lenders. In simple terms, the tighter lending regulations are meant to curb the possibility of a similar occurrence. This has accumulated to a much stricter lending environment whereby conventional lending institutions would not, or could not finance loans similar to those that I was seeking. These days, alternate private lenders often provide the answer to such situations. Traditional banks often fail to see such opportunities due to their risk adverse nature. Despite the higher cost of capital, such loans allow business people like myself to realize substantial synergies through the availability of immediate capital to fund our business ideas – something that I would not have been able to achieve had I waited for a conventional loan.
It does take foresight to understand what the true value and potential that such forms of financing can do for a business. It is also highly advantageous and at the same time justifiable when one looks at it from a cost to benefit standpoint. I therefore went to Tripp because I knew he would listen and understand what I needed fully, before trying to pitch me in on solutions. We spent hours upon hours reviewing all the options and potential outcomes before arriving at a solution.”
“Although we had to engineer something unconventional and which we did not typically do, this deal is testament to the fact that we are open to creative alternative solutions as long as they meet our borrower’s needs and are potentially beneficial to our investors,” says Tripp.
New’s transaction illustrates USF’s responsiveness, agility, and flexibility in tailoring financial solutions to the specific needs of its respective borrowers. These traits are something that its borrower clientele have become accustomed to, and which USF is committed to continue extending to its future prospective borrowers. As for its investors, USF’s unparalleled track record is a statement that speaks for itself – 58 consecutive months of positive returns. Tripp explains that “USF’s mission has always and will always be to create value as it continuously strives to construct opportunities in which it is a win all around for every party involved.”
To contact United Security Funding for more information, call 310-276-0900 Ext: 902, or visit their website at http://www.unitedsecurityinvestors.com