Foundry has structured over $40,000,000 of multi-family purchase + improve loans in the first quarter of 2022. We have developed a unique structure to minimize the amount of cash equity required from investors in order to maximize your return on equity.
In one recent example, an investor bought a building for $2,000,000 and it required $1,500,000 of improvements before tenants could move in. The building was fully vacant.
Foundry financed 85% of the purchase price ($1,700,000) and financed 100% of the construction costs ($1,500,000). Not only that, we financed 100% of the interest costs ($300,000). The borrower did not have to make monthly mortgage payments.
The completed value on lease up was $6,500,000. Foundry was able to secure a term debt mortgage of $5,000,000 with CMHC. With that new term loan the borrower repaid the $3,500,000 of acquisition and construction debt. They repaid the $300,000 of equity originally invested and put $1,200,000 of tax free cash in their pocket. The borrower now owns a cash-flowing multi-family building, has pulled out $1,200,000 of equity, completely recovered their investment of $350,000 and they have $1,500,000 of equity in their real estate. In one year the borrower effectively made a profit of $2,650,000 (tax free) with just a $350,000 investment.
For advice on new projects, or to refer someone your know, please reach out to one of our team members.
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