Alternative Capital Market Solutions
For Commercial and Multifamily Real Estate
Have a Scenario?
Second Lien Program:
Loan Amounts: $500,000 to $2,500,000
Lien Position: 2nd deed of trust
First Lienholder:
- Insured Depository Institution (bank, credit union, etc.)
- Other institutional lenders
Rates:
- Target: 12%
- Range: 10% to 14%
CLTV:
- 75%Target = sub-75%
- Higher case-by-case on value add
Points:
- 2 to 2.5 points
- Broker fees not to exceed Wilshire’s points
Property Types
- Multifamily (5+ units)
- Office
- Warehouse
- Light Industrial
- Senior Assisted Living
Geographic Location:
- Target = Western US
- Will consider mortgage (judicial foreclosure states) at lower loan to values
Transaction Types
- Purchase
- Refinance
- Cash Out
- Target = cash going back into the property to create value
- Cash-out for other purposes on cash-flowing properties at lower CLTVs
STRUCTURE
- Recourse:
- Personal guaranty required
- Underwriting:
- In place, cash flow must support the capital stack
- Prepayment:
- No Prepayment Penalty
- Terms:
- Term: 2 year fixed, I/O with balloon
Recent Second Lien Transactions
California
Loan Amount: $500,000
Purpose: Refinance
Lien Position: Second
Closing Time: 28 Days
First: $1,235,000
A good customer of the bank faced a maturity date on their existing loan. However, the refinancing request exceeded the bank’s loan-to-value threshold. Working with the banker, Wilshire funded into a combined loan facility consisting of a new first loan made by the bank with an accelerated amortization schedule and a new interest-only second loan made by Wilshire. Accelerating the amortization on the first loan would reduce the combined loan to meet the bank’s LTV threshold for a new loan by the bank in 18 months.
Florida
Loan Amount: $520,000
Purpose: Cash Out Refinance
Lien Position: Second
Closing Time: 10 Days
First: $2,600,000
The purpose of the loan was to facilitate the restricting of the capital stack through a new first and second mortgage. In addition to paying off the prior debt, a portion of the proceeds was used to buy-out an equity partner in the transaction.