Bridge Lending on 1031 NNN deal in Alabama

Marcy, Michael and Jack talk about bridge lending on 1031 NNN deals that Gelt Financial Provides.

“Jack: Hello, it’s Jack Marcy and Michael.
Marcy: Hello.
Michael: Hello.
Jack: So, I wanted to make this video… Okay, so Marcy, I want everyone to talk, but I want to be clear. I want to make this video. I want to make this particular video on Triple Net 1031 exchange Bridge loans. We’ve been doing a ton of them lately. We just closed one the other day for how much?
Marcy: 572,000.
Jack: Where was the property?
Marcy: It was in Alabama, actually.
Jack: Alabama. Alabama’s a great state. I love Alabama. Michael, who was the tenant?
Michael: Pop shelf, which is a third party to Dollar General, like a subsidiary.
Jack: And Dollar General guaranteed the deal?
Michael: Yes.
Jack: Marcy, walk everyone through what happened.
Marcy: Well, we’ve been getting a lot of inquiries for 1031.
Jack: I think, can I just say something? I think that people don’t realize that when they do 1031s, that take— or let me say it this way, when you do a 1031, you could either buy it all cash, or you can get financing. In today’s market, if you don’t have all the cash, let’s say you have, in this case, let’s say it was a three-million-dollar deal, the guy had two and a half million. We bridge that other 500,000 or 572,000. I don’t think people realize that in 1031s, there’s a bridge option. Michael, why don’t you tell everyone, okay, what, like what exactly, what you told me before, why people come to us, what the guy told you yesterday.
Michael: Well, the issue is timing, so he only had a certain time to place his cash before he had IRS penalties.
Jack: Big penalty.
Michael: Tax consequences, and so he needed someone that could move quickly. No appraisal, they didn’t have any time for that. But it was a good triple net tenant which guaranteed the lease, and they needed to make sure that they could close in 2 weeks with no hiccups. They can’t afford it. It was more the pay a little more, get service that you could guarantee your closing.
Jack: And how valuable is that to them?
Michael: Hundreds of thousands of dollars.
Jack: By the way, I kind of feel like I’m a director here. First time in my life, I’m directing.
Michael: No, no, but it’s true.
Jack: I’m directing.
Michael: It is true. It is a huge value, and one little hiccup, he could lose hundreds of thousands of dollars. Is what it could have costed him, so he put a lot of trust in us to get that close quickly.
Jack: Now, Marcy, once we’ve got the signed term sheet, why don’t you walk everyone through the process, and in this case, we could have closed it within days. But the holdup was what was in the estoppel, or they were—
Marcy: Yes, the buyer wanted the estoppel from the tenant. So that took a little time because we were dealing with a corporation that was occupying the property. So, the deal came to us, and I would say they came to us with title. We just updated the title, and we were really ready to close within 3 business days. But we, you know, delayed it a little bit because they wanted…So, we were able to get a close within, I’m going to say close within 10 business days.
Jack: But we could have done it quicker.
Marcy: Absolutely, but the whole point of the 1031, so anyone that’s Googling 1031, we’re a valuable solution for your situation. If you have funds that need to be put somewhere within 45 days, we can get that done for you. We can get the loan, you know, to subsidize the difference if you need the extra funds. We can get that done, and that will save you so much money. You want to pay the government, you’re investing in a piece of real estate, and then making money from the real estate.
Jack: Again, we’re a tool for credit tenant investors, people who are buying 1031s on the bridge side. We’ll keep it long term just for everyone sake—
Marcy: Of course.
Jack: We’ll keep it on our books forever, but most of the time they want to pay us off because we’re more expensive than a bank, clearly, and refinance with someone else.
Marcy: But regardless, I mean it takes time to get an SBA loan, it takes time to get a commercial loan through a bank, it just does, and we can get it done fast, and it’s worth it to save yourself so much money, not paying the government, you know, to come to us.
Jack: Michael, anything to add?
Michael: Nope.
Jack: Marcy, anything did we leave anything off?
Marcy: No, I’m just, you know, excited to be able to do these types of deals, beautiful real estate, and we’re fast. We get done.
Jack: You speak to Michael; you speak to Marcy all the time. The Brokers and the borrowers love them and love the whole team. Remember, “When your bank says no, we say yes”. Check us out at Gelt Financial. Subscribe to if you’re seeing us on YouTube, TikTok, Instagram, wherever you’re seeing this. Subscribe to the channel, leave comments, criticism, questions, we answer them, and that’s it. Have a great day, take care.”