CASE STUDY | SITUATION

 

$2.5 Million Cash Needed to Finish Construction

$6.5 Million Custom Investment Property

 

 

 

 

 

 

 

Lending Challenge:

 

  • Client - developer ran out of money and was unable to finish the remaining construction to completion.

 

  • Client paid cash for construction but was unable to continue paying the general contractor who filed a mechanics lien.

 

  • Sub contractors also filed mechanics liens rendering the property uninsurable by title, causing lenders to pass on the loan request.

 

  • The custom home was valued at $6,500,000 at completion and had $1.5m in liens plus $1m required by client to complete construction.

 

Testa Capital Group Solution:

 

  • Had title issue an indemnity mid-construction mechanics lien waiver agreement for client too personally guaranty.

 

  • Obtained lien releases from general and sub contractors in exchange for concurrent payments in full through escrow.

 

  • Completed a new $2.5m 1st trust deed that paid off all liens through closing and was able to secure required title insurance.

 

  • After providing clean and clear title, netted client funds required to complete construction as well as an additional investment need.

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Closed Loans

Contact 

 

Testa Capital Group

620 Newport Center Drive

Suite 1100

Newport Beach, CA 92660

t: 888.724.7925

f: 1.888.724.7925

info@testacapitalgroup.com

Licensing

 

Testa Capital Group

Real Estate Brokerage

Licensed by the

California Department

of Real Estate

DRE # 01790365

NMLS # 328319

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