Wilmington Commercial Hard Money Loan

Wilmington Commercial Hard Money Loan Highlights

The borrowers are seeking a refinance/cash-out loan for their property in Wilmington, NC. The property is a mixed-use building, primarily serving as a hotel with a boutique coffee bar on the main level, Total square footage equaling 9,766. The property was purchased in November of 2021, for $2.25M and the borrowers invested approximately $2MM in renovations, combining two properties into one. This extensive renovation has increased the estimated “as-is” value to $5MM. The property’s cash flow is projected to increase significantly, with an additional $1.8 million expected in 2024 from the boutique coffee bar bringing total gross sales to $2.5 million for the year. The borrowers are requesting a $2.45MM loan to refinance the existing debt held by a traditional bank. The borrowers are reimbursing themselves a portion of the renovation costs with our bridge loan

About the Neighborhood

Wilmington, North Carolina, is a vibrant coastal city known for its historical charm and thriving economy. Key sectors include film and television production, education, healthcare, and technology, supported by institutions like the University of North Carolina Wilmington (UNCW) and the Port of Wilmington. The city’s strategic location, access to major markets, and a growing technology sector make it an attractive destination for businesses. Additionally, Wilmington offers a high quality of life with its scenic beaches, historic downtown, and cultural activities, drawing both talent and investment. With continued investment in infrastructure and a supportive business environment, Wilmington is well-positioned for sustained economic growth and business expansion.

Why We Like This Opportunity

The borrowers are experienced in the hospitality industry. They currently own three boutique hotels in Wilmington, NC. One of these is a historic inn located in downtown Wilmington, offering convenient access to riverfront museums, the train station, and the ferry terminal, making it particularly beneficial for business travelers who can attend meetings without the hassle of traffic.

Experienced Borrower

The borrower is a successful real estate investor in high-end real estate industry in Florida. He’s sold multiple Florida homes for over $2M+ and has a high net worth and strong liquidity.

Seniority

The first-priority mortgage lien position is the most senior and highest priority within the capital structure. In the event that a borrower defaults, the lien priority determines the order in which lenders are repaid. Senior lenders are always repaid first. All subordinated positions, including the amount held by the Originator and its investor syndicate, act as a buffer in the event of a deterioration in the Properties’ value.

Personal Guarantee

The Loans are personally guaranteed by the borrower, spouse, and all principals in the LLC. Additionally, the Sponsor and/or Guarantor are obligated to contribute monthly payments to maintain a tax and insurance reserve. Failure to adhere to reserve contribution requirements would lead to the triggering of a debt service and operating expense/shortfall guarantee.