A partnership loan is very common. A partnership loan allows its members to pool their resources and talents to divide up the costs and responsibilities of a new business endeavor. GRP Capital is pleased to announce that Managing Director Krishan Patel has just closed a loan on a large partnership for a new property in New Mexico.
While a partnership loan may be common, it can make a closing more complicated.
Typical complications in partnership commercial real estate transactions:
• Who will be officially managing the business? For this deal, two of the six partners agreed to be the managers. Their operation agreement clearly stated this setup. At signing, only the managers had to sign the full loan documents, while the other partners just had to sign guaranty paperwork. We even arranged for out of state signings.
• How will equity injection be handled? For this loan, the partners were extremely organized about getting bank statements that were clean (free of large hard-to-trace deposits in the last three months) and using those to contribute their equity. It is very important for partners to be transparent with each other about their sources of equity. They need to be sure that their equity contributions will be be acceptable to the lender.
How We Knew this was a Good Partnership:
Patel remarked, “I was very pleased to get to know this group of motivated, bright entrepreneurs. To be sure, they had carefully thought through many aspects of their purchase. Consequently, they contacted us to take this loan from letter of intent to closing as smoothly as possible. In order to meet their needs, we communicated with them regularly and they appreciated the transparency of the loan operations. They were model clients: organized and responsive.”
GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates. The partners took possession of the property and are ready to make this business even more profitable in the future. In addition, the partners are able to benefit from a lowered mortgage payment for the first few months as part of the latest stimulus package.
Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.