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Wednesday, May 8, 2013

SE Seattle Investor Loans

12:50 PM
I am organizing a real estate investment tour of Southeast Seattle for the Real Estate Association of Puget Sound from 8 am - 11:30am on Friday, May 17. The City Office of Economic Development is encouraging investment in this part of the City, and will be a sponsor of this tour along with the Rainier Chamber of Commerce and the Rainier Valley Community Development Fund. I will be leading the tour along with Jean Weldyke, a commercial broker with over 35 years of real estate experience in this community.

In order to stimulate development in this area, the RVCDF offers a number of financial incentives, including loans. Their loans are not the same as those at traditional lending agencies or institutions. They look at
factors including character, business capacity, and overall contribution of products and services
to the Rainier Valley Community.

Their loan products are designed to encourage and support real estate investment
in the Rainier Valley. The lending area is defined as south of Interstate 90 as it crosses Rainier
Avenue (northern boundary), Rainier Avenue, M L King Way South, and Boeing Access Road
(southern boundary).

Loans include:
  • Acquisition loans for commercial property (used for business purposes)
  • Renovation/Rehab loans
  • Land Acquisition/ site assemblage and pre-development loans
  • Subordinate and gap financing leveraged with senior institutional debt
RVCDF loans to existing companies or to new businesses looking to locate in the Rainier Valley.

These loans should help businesses retain or create new jobs. The businesses should provide
goods and services which are in needed for residents of the neighborhood.

These loans can be used for working capital, equipment, tenant improvements and expansion
of business premises.

Real Estate Loan Program Parameters:

Loan amounts are $100,000 to $2,000,000;
Interim short term financing is available for up to 7 years, and up to 25 year amortization or interest only
4% - 5% fixed for term of loan;
1.25% loan fee plus 3rd party costs (appraisal, environmental report, legal
closing, title);
Loan to Value: Up to 80%, but also subordinate financing with combined LTV of 80%

Business Loan Program Parameters:

$25,000 to $500,000;
Up to 7 years on equipment or term loans;
Can also do revolving credit lines secured by receivables;
Generally do not do unsecured lending;
Typically want lien positions on residences of business owners, security
agreements and pledges on all business assets;
5% - 6% fixed for term of loan;
1% loan fee plus 3rd party costs (appraisal if needed, legal closing costs)

The cost of the tour is $39 for REAPS members, and $59 for non-members. Space is limited, so please pre-register at the www.reapsweb.com website. For more information, please contact Wendy Ceccherelli at 425-270-7292.

Happy investing!

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