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Finance for Real Estate near Salt Lake City

Monday, August 21, 2017
Borrower   The developer of a master-planned community in Tooele, Utah. Tooele is just outside Salt Lake City.
Loan   A five year $5.5 million loan at 13% for the first year and 18% thereafter. When this loan was repaid, we made a further $3.5 million dollar loan on the same terms.
Collateral   A first lien on 2,970 acres which were permitted for development as a master planned community in Tooele, Utah. The development is in a beautiful valley with a view of the surrounding mountains and the Great Salt Lake. It will ultimately contain 6,375 single family lots, 1,840 multi-family units, an 18-hole golf course, 200 acres of commercial property and 115 acres of pre-sold institutional property.
Guarantors   The principals of the development company guaranteed the loans personally
Purpose   The loans were required to raise the working capital necessary to put in infrastructure and create the subdivisions in the initial phases of the 10-year project.
Exit strategy   The borrower planned to repay the loans in stages out of the proceeds of the sales of subdivisions to builders.
Outcome   In less than one year they closed on 28 lots, wrote contracts on another 300, and option contracts on another 90 lots for an aggregate of $7,000,000 of lots sold and $2,000,000 of lots under option. The initial loan was repaid in less than two years, and the second loan was repaid in full after a further two years.




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