Danielle made an opportunistic investment and purchased an underperforming 12-unit multifamily property for $500,000. In the past 6 months, she spent $250,000 and has completely renovated the building. She now has tenants in each unit. When the time came to refinance her mortgage loan, Danielle took a trip to the bank. Much to her surprise, the bank valued the property at $725,000 on a loan-to-cost basis (acquisition cost plus renovation costs) and ignored its current appraised market value of $1 million.
Danielle thought she could get a better deal at the bank across the street. According to Danielle’s loan officer, the bank’s seasoning requirements prevent commercial borrowers from refinancing until they’ve owned their property for more than 2 years.
At Silver Hill, Danielle’s property would be valued at its fair market value, not on a loan-to-cost basis. And with no seasoning requirements, their program would be a perfect fit for her unique situation.