A Vancouver buyer was purchasing a city block in an area of transition. The borrower needed to close quickly and wanted maximum leverage. However, the borrower lacked ample cash flow to support the debt, and the loan to purchase price was high.
The First National Solution:
The First National team provided $40.5 million in financing, which was 96 per cent of the purchase price. Funding closed within a month. The team was comfortable with the purchase price because it was settled on two years prior in an appreciating market.
The First National Approach:
Research and knowledge played key roles in this deal. With deep experience in the area, the First National team understood the inherent land value of the potential purchase. In addition, the team consulted municipal authorities to gain a better grasp on future development potential in the area. Ultimately, the team felt that the value of the land was greater than the higher purchase price and was willing to take the smart risks required to make the deal happen.