Case StudyReverse 1031 Exchange Apartment Building Private Money Loan
Loan Amount: $8,200,000
Loan-To-Value: 75% LTV
Situation & Challenge
Our client, who was selling a smaller apartment building for $3.5 million through a 1031 Exchange to acquire this property for $11 million, ran into a problem when the buyer’s financing on the $3.5 million property fell through. In order to close on the $11 million property, the investor needed to switch from a 1031 Exchange to a Reverse 1031 Exchange. (In very simple terms, a Reverse 1031, the exchanger acquires a new property and has 180 days to sell the previous property).
Solution & Result
First Capital Trust Deeds worked with a private money fund to pull $2,000,000 out of the vacating $3.5 million property for the down payment. Then, we used an $8,200,000 private money bridge loan to complete the $11 million apartment acquisition through a Reverse 1031 Exchange.
Within three months of closing, the Reverse 1031 Exchange was completed as a new buyer performed on the $3.5 million sale, closing out the 1031 Exchange.