CASE STUDY NO . 4
Situation : A General Contractor Investor ( GCI ) owns two acres of prime residential real estate , free and clear , with no loans or liens against the property . The land had already been successfully subdivided , entitlements are all in place , architectural drawings and plans are 100 % complete for all the SFRs . Further , the GCI has already arranged a construction loan with a major bank for all the new houses , to be built oneafteranother , in a series . The only thing left to do , prior to starting work , is to pay for the permits on the first few houses . modest amount still due , which the court ruled in this case had to be paid off completely before Probate could close . Once probate closed , then the four beneficiaries could each receive their respective sixfigure proceeds .
Problem : To say that the four heirs to the estate did not get along well would be an understatement . There was apparently longstanding bad blood between several different family members . The result is that , because of a total lack of trust , none of them could or would agree to pay off the amount due on the mortgage . It was a financial standoff .
Problem : The wife of the GCI recently filed for divorce , tying up all the CGI ’ s assets , including the funds he had previously put aside to pay for the permits .
Solution : A STEF was brought in to provide funds for the permits . The STEF was provided with collateral via liens against the lots the CGI owned free and clear . Based on that , the STEF fronted the money for the permits , which had already been previously approved . By prearrangement , the bank providing the construction loan had agreed to “ overfund ” the construction loan in order to provide payback to the STEF for the funding they provided + the STEF ’ s markup . That same day , the loan got funded and the permits were issued . Construction soon got underway . It all turned out OK at the end for all parties .
CASE STUDY NO . 5
Situation : A property was part of an estate . The owner died and the property went into Probate . While the property had a lot of equity in it , there was still an outstanding first mortgage with a
Solution : A STEF was referred into the situation by an attorney . The STEF provided sufficient capital to pay off the one remaining encumbrance : the first loan . Probate was able to close ; the heirs got their money and STEF was paid off for its investment + standard markup . All parties walked away with a smile on their respective faces .
CASE STUDY NO . 6
Situation : A successful REI Pro owned several commercial and industrial properties free and clear . He recently identified an investment property he wanted to buy from a distressed seller . The REI Pro calculated that he could turn right around and immediately sell the property for a handsome profit , since it came with an extraordinary amount of equity . The REI Pro had the property under contract . Further , the REI Pro had already lined up a cash buyer to purchase the property . The buy and sell would only take one day to successfully accomplish , best case scenario .
Problem : The REI Pro , at that time , was “ asset rich and cash poor ”. He had no ready cash to use to buy the investment property he wanted to immediately flip . To further complicate things , he had recently defaulted on a bank loan , which had caused his FICO score to plummet . Due to the hit on his credit score , no banks in the area were willing to loan him the money he needed to buy the equityrich property he had his eye on .
Solution : A STEF was brought into the picture who fronted the purchase price , once the REI Pro pledged several properties he owned in order to crosscollateralize the deal . It all wrapped up to everyone ’ s satisfaction .
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