Finance for Las Vegas Timeshare

Friday, February 15, 2019
Borrower   The owner of an apartment complex in Las Vegas
Loan   A $7.6 million two year loan at 15% for the first year and 24% thereafter, refinanced by a three year $6.8 million loan on the same terms.
Collateral   A mortgage lien on an apartment complex in Las Vegas The Guarantors provided securities portfolios worth in excess of $5 million, and liens on several commercial properties in California worth over $9 million.
Guarantors   MPTV, Inc. (the borrower's holding company) and three investors in MPTV who pledged their assets to secure their guarantees.
Purpose   The proceeds of the initial loan were used to repay the existing first, second and third mortgages on the Lake Tropicana timeshare project in Las Vegas, to provide some of the funds to build timeshare models and for some of the costs of renovating the apartment complex, which had become rather run-down.
Exit strategy   The borrower raised additional finance secured by the apartment complex, and paid off $2.5 million of our first loan out of these proceeds. Their new loan went into default, and their lender started to foreclose.
Our second loan refinanced our first, and raised sufficient new money to stave off the foreclosure. Unfortunately, time-share sales never reached the point where the project became viable and so the escrows were never broken. Our loan has been paid in full by the guarantors. We believe that the apartment complex was eventually lost to foreclosure.
Outcome - all rights reserved

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