63%
Loan to Value
$355,950
Total Loan
Ben
Shrara
From Valuation Woes to Investment Wins in Massachusetts
Case Study I DSCR
Navigating through undervalued appraisals and looming loan maturities, a strategic refinancing solution turned a precarious property investment into a success story.
63%
Loan to Value
$355,950
Total Loan
Ben
Shrara
The Stats
$355,950
Total Loan Amount
7%
Interest Rate
63%
Loan To Value
1.267
DSCR
The Stats
$355,950
Total Loan
Amount
7%
Interest
Rate
63%
Loan To
Value
1.267%
DSCR
Overview
Loan Program Used
DSCR
Closing Date
November 5th, 2024
Location
Worcester, MA
Property Type
Single Family
Goals
Achieve timely cash-out refinancing by effectively managing low appraisals and imminent loan maturity with targeted value and debt service improvements.
3 min read
Project Summary
Confronted with a property that failed to meet debt obligations and faced a devalued appraisal, Ben Shrara and the Express Capital Financing team acted quickly, devising a personalized strategy that recalibrated the asset's worth and enhanced the debt service coverage ratio.
Their timely and expert approach not only ensured the client could pay off the existing loan and achieve the desired refinance but also affirmed the strength of the client's long-term investment plan.
The Challenge
The immediate obstacle was the property's failure to service its existing debt as expected, compounded by an appraisal that undervalued the fair market rent. This valuation issue directly impacted the debt service coverage ratio (DSCR), an essential metric for securing refinancing, and was further impacted by an approaching deadline for the current loan's maturity, putting the investor in a precarious position.
● Suboptimal Debt Servicing: Initially, the property did not meet the debt service coverage ratio (DSCR), a critical financial metric for securing refinancing, casting doubt on the feasibility of the project.
● Low Fair Market Rent Appraisal: The property's appraisal revealed a lower-than-expected fair market rent, further complicating the refinancing process by undermining the property's income-generating potential.
● Urgent Closing Deadline: Complicating matters was the tight timeline necessitated by the looming maturity date of the current loan, introducing a critical deadline that required swift action.
The Solution
Ben Shrara and the Express Capital team swiftly employed a highly customized approach to tackle these challenges head-on. Recognizing the tight deadline, they expedited the processing and immediately submitted comparable property analyses to adjust the 'as is' value of the property. This strategic move lowered the leverage to the property's value, which in turn significantly improved the debt service coverage and decreased the applicable interest rate.
By crafting a tailor-made financial strategy, Ben Shrara ensured that leverage needs were satisfied without compromising investment objectives.
Total Loan Amount: $355,950
Interest Rate: 7%
Loan To Value (LTV): 63%
DSCR: 1.267
Key Takeaways
Thanks to the expert maneuvering and strategic foresight of Ben Shrara and the team at Express Capital Financing, the client successfully paid off the maturing loan and secured the desired cash-out at closing. This outcome not only alleviated the immediate financial pressure but also affirmed the client’s investment strategy and positioned them for future success.
- Personalized Financing Solutions: Ben’s ability to craft and implement customized financial strategies plays a pivotal role in overcoming investment obstacles.
- Responsiveness and Speed: Quick submission of comparables coupled with timely service interactions can make or break the success of time-sensitive deals.
- Expertise Matters: Working with a lender who brings a wealth of experience and a flexible, creative mindset to the table is invaluable.
- Strategic Partnerships: Aligning with a lending partner like Express Capital Financing, who puts the investor’s goals at the forefront, proves to be a significant factor in achieving financial success.
Overcome, Optimize, Outperform with Express Capital Financing
Whether it's overcoming a devalued appraisal or optimizing your debt service coverage ratio, partnering with us means accessing tailor-made strategies that not only meet but exceed your investment needs. Embrace the opportunity to transform challenges into victories and secure your investment's future with the expert guidance and personalized attention of Ben Shrara and the Express Capital Financing team. Don't let another moment pass—Contact us today for a DSCR loan that drives your project to success
Featured Topics
Overview
Loan Program Used
DSCR
Closing Date
November 5th, 2024
Location
Worcester, MA
Property Type
Single Family
Goals
Achieve timely cash-out refinancing by effectively managing low appraisals and imminent loan maturity with targeted value and debt service improvements.
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