Purchase & Rehab Bridge Loan for Multifamily in Evansville, IN

The Opportunity

A commercial real estate broker introduced Lima One to a client who wanted to purchase and rehab two multifamily properties in Evansville, Indiana. These Class C properties, both built in 1950, needed significant rehab in order to fulfill the investor’s strategy to reposition them as Class B workforce-type housing.

To achieve this, the investor needed flexible bridge financing that covered both the purchase price and the rehab budget. The investor wanted to finance these two properties, along with one across the Ohio River in the adjacent Owensboro, Kentucky, market at the same time.

The Solution

Lima One’s multifamily value-add rehab bridge loan was the perfect solution for this real estate investment strategy. The borrower was able to close a single, $13 million loan to purchase three apartment complexes across two states. The 24-month interest-only loan provided the funds needed to purchase the properties plus construction funds to adequately rehab the investments.

The borrower was able to secure a non-recourse loan and did not have to pay interest on undrawn rehab funds, providing the best overall financing solution for the properties. Through this strategy, the investor will increase the overall value of the three properties to $22 million, while providing 240 quality workforce housing units across Indiana and Kentucky markets.

The subject property was in poor condition and tenant-occupied at closing. The Borrower plans to continue leasing the units at the market and eventually refinance as an exit strategy. This multifamily property bridge loan was funded in April 2022.