RDI Development Company announced that it recently secured a $5.2 million dollar construction loan for an assisted living facility in Rossmorr, California. RDI purchased the land for 1.2 million in November with an appraised value of $2.6 million and moved forward with with entitlements and plans immediately in order to have the project shovel ready. RDI chose Pacific Mortgage Fund (PMF) of Irvine, California for a hard money commercial construction bridge loan at 8.99% percent and swift to completion. In order to bypass the slow time frame with traditional lenders, the company chose a quicker path and determined that the increased cost of funding would be made up on reduced hard costs. The project total cost is estimated at $8,250,000, with a stabilized value of $13,500,000.
The process took just 25 days from submission and the new loan funded in early November, with PC2M in charge of draw allocations and construction fund reserve management. The company plans to pursue a long term take-out shortly after completion with HUD or AARP finance partners upon completion/stabilization. RDI Development elected a slightly higher interest rate to receive a no-prepayment-penalty loan.
"Having a financial interest in your project is critical for any investor. The key component to construction financing is the strength and capital contribution of the principal(s)," says Jyo Kim. “Pacific Mortgage Fund is looking for principal/developers with significant experience and accomplishments. We require a minimum of 30% of total costs to be contributed by the principals. This could be in the form of land they already own or funds they have already spent and documented. The parameters of Pacific Mortgage Fund are fairly lenient. The money has been allocated and it will be spent.”