We just provided with a experienced investors 4.3 Million bridge Mortgage on 3 credit tenant deals as part of a 1031 Transaction. This borrower will refinance with a bank, but a bank could not close in time.
“Marcy: Hi Jack.
Jack: Okay, Marcy Berger, we got this thing working. So, we just closed. You did a ton of work, and you and Michael here—you did a lot of work too, but—
Marcy: Getting them to close, that’s—
Jack: That’s right. Okay. All right.
Jack and Marcy: Three triple net—
Jack: Credit tenant triple net 1031 guy deals. So, a borrower, very, very sophisticated borrower. This is a repeat borrower. We did another deal for him a couple of months ago. Was buying three credit tenant deals, triple net deals, all beautiful deals in a 1031, and he needed to close quick. He was up against the time deadline. You know, banks, I don’t want to say anything bad about banks, but banks—
Marcy: No, they just take a long time.
Jack: Oh, my, a long time. It’s like watching—
Marcy: Months.
Jack: Brutal.
Marcy: Yes.
Jack: He brought us the deals; we approved the deals; we closed them right away. It was 4.3 million. You know, so this is actually the end of last year. We did a bunch of deals that were the similar profile—very strong and sophisticated borrowers that can go anywhere with perfect 10-inch credit tenants, Family Dollar type, CVS, Walgreens, made these—
Jack and Marcy: Urgent cares.
Marcy: But they came to us because we could get it done fast. Fast. Yes, we do everything in-house. The only thing—yeah, but that’s the key.
Jack: We close it fast, seamless, and this deal got a little complicated. It was supposed to close three at once. We wound up closing one, and a couple of weeks later, another. Yes, the bottom line is borrowers come to us for speed and access to money. He paid us a higher rate than a bank, much higher. I don’t know in today’s market—
Marcy: Yeah, it was higher, but it wasn’t—
Jack: But it wasn’t much higher in today’s market because who knows what banks are, but he was super sophisticated. People think that most of our borrowers have credit problems, and some of them do, but—
Marcy: Yeah, credit problems, different, foreclosure—
Jack: But in his case, he had no problems. He just wanted to close quickly, and it was worth it to him to pay us a premium to get the deals closed.
Marcy: So, let’s give the viewers a definition of 1031 exchanges, what that is exactly. Well, he has to put money into new real estate; otherwise, he will be paying someone else the money.
Jack: IRS.
Marcy: Yeah, IRS. I didn’t want to say it on, you know, I didn’t want to be quoted.
Jack: Do you think the IRS will come after us for quoting them?
Marcy: That we like, you know, solved the problem, so the IRS did make extra money.
Jack: It’s a lot, tons of people in real estate do. So, a good amount of what we do, and we did a deal the month before, and one before, and the one before that. A guy was buying a Dollar General subsidiary, what was it called; Pop-up, guaranteed he was paying like 1.6 or 1.8 million, 4 million, and he was like 500,000 or 550,000 short, and we closed it again. He’ll take us out with the bank. So, this deal, the same thing with a 4.3-million-dollar deal, blanket loan. And by the way, we didn’t do any credit or no appraisals, no information. I don’t wanna say no information on this guy; we obviously got his name and his things like that.
Marcy: But, you know, we’re closing LLC, you know, holding the real estate.
Jack: Yeah, it’s strictly collateral-based lending, and the borrower was thrilled because, you know, I happened to meet this borrower; he came to the office, I think after one of the other closings. It was him and his brother, and he said, “Look, I’d rather pay you a little high rate and know I’m going to close than have to worry about a bank letting me down, dragging it, and owe the IRS a fortune.”
Marcy: Right, exactly, so everyone wins.
Jack: Yeah, it’s a good— I wanna go into this because it’s a good amount of what we do is we provide capital to borrowers who can’t go to a bank.
Marcy: Absolutely. I mean, we do tag ourselves to say that we’re non-bank lenders, but the truth of the matter is we do loans, a considerable amount, a lot of them for people that can’t go to a bank.
Jack: I could think of a ton. We closed the deal in a big city in Ohio for a local guy. He bought a building for, I forget how much, 3 million, and we lent him like 1.6 or 1.7 million.
Marcy: But we get it done fast, and he had it closed. So, it was worth the money for him to pay to get it done. So now he owns the real estate, and he got out of our loan, you know, within six months of our deal with a bank permanent financing, but he was still able to capture the property because we were able to bridge him.
Jack: Yeah, that’s a good one. A good amount of what we do is bridge financing where, again, the borrowers are perfectly good credit, but they just need to close quick, and they’re coming to us. At Gelt, you’re going to always speak to a decision-maker. We’ll 99% of the time quote the deal out on the very first call, issue a term sheet within a half hour, an hour. Once a term sheet is signed, we’ll move to close the deal. You know, we’re averaging 10 days sometimes, a lot of times less than 10 days.
Marcy: It just depends on how fast the title comes back, and once the title’s back, we move along. That’s it.
Jack: And we really don’t do appraisals.
Marcy: We do our own evaluation in-house. I wanted to mention one other deal that came by on my desk yesterday or today. I don’t remember which day, but someone is bidding on an auction, and they came to us to see if we would do the loan. And before, I don’t know if they’re going to get the property, but we’re going to issue a term sheet, and they know that they have financing in place with basically a guarantee that we will close out the loan within 30 days because that’s what the auction site expects. And we’re gonna go ahead and do that, and if the guy gets the property in the auction, he knows he has a loan with us.
Jack: You’re right. It was a beautiful office. I forget how big, but very nice, occupied like a whole city block, major city. And we do a decent amount of like 10X auction deals. People are buying properties at auctions.
Marcy: Right. So, if you do buy something at auction, you have your eye on something at auction, reach out to us. We’ll look at it, see if we’re interested, and if we’re going to issue a term sheet, at least you know if you do acquire the property, you have financing to get a tenant within 30 days because we can do that.
Jack: And we’re flexible. We do short-term deals, but we’ll also do long-term deals too. We have a guy who we just extended. We have tons of borrowers who we extend all the time.
Marcy: Yeah, that they balloon, and then they decide that they didn’t look to refinance in time, or they decide that they’re just going to stay, they’re staying with us, and we extend their loan for a longer period of time.
Jack: I forget the exact number as of 1231 we had 44 or 46 deals, something like that on the books for more than 15 years.
Marcy: Wow, it’s crazy.
Jack: Yeah, I had all my hair then. I wasn’t fat then, miserable, um, okay. So, check us out at geltfinancial.com. Oh, remember, like this on YouTube or Twitter or wherever you’re seeing it. Yeah, like it, leave your questions. We answer the questions and get a ton of questions and ton of calls from these, remember, 1031 bridge lenders. Oh, we also do, which is important. We’ve done a bunch of agency loans. We just also closed in Chicago an apartment building that they took us out with an agent. I don’t even know if they took us out yet.
Marcy: I think they did.
Jack: We closed the loan, and they’re going to an agency. And we have another one coincidental in Chicago too. They came to us; they couldn’t get an SBA loan in time. We provided the bridge, and they’ll take us out with an SBA loan.
Marcy: Yeah, because SBA loans take some time, nine months.
Jack: Everything takes a long time. Check us out at geltfinancial.com. If you send us an email at loans@geltfinancial.com, call us at 561-221-0900, ext.103, and most importantly, have a great day. Thank you.”
Category: Deals Done
Tag: bridge mortgage
