100% LTV/LTC PREFERRED EQUITY AND MEZZANINE FUNDING
Urban Mutual’s Preferred Equity Program can assist professional real estate developers and investors in leveraging their projects as high as 100% combined LTV/LTC- a ‘blended cocktail’ of First Mortgage Finance combined with Urban Mutual’s Preferred Equity and Mezzanine funding - enabling developers to consummate projects without having to deploy their own capital, and allowing seasoned real estate investors to take advantage of more market driven opportunities.
The strategic objective of Urban Mutual is to enable experienced builders and developers to significantly expand their business by taking on additional projects, when they have the necessary construction infrastructure, expertise and excess deal flow to do so, but are cash constrained due to a lack of available funding liquidity.
Urban Mutual’s goal is to actively partner with developers who are consistently completing 5 to 10+ projects per year, and become their outsourced corporate advisory and finance facilitation division, with a view of doubling or even tripling their development production volumes and potential deal acquisition flow.
Benefits include:
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Development finance up to 100% LTV/LTC.
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Low blended interest rates.
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Earnest Money Deposit funding facility available.
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Pre-approved LOC of up to $10,000,000 for fast funding of time sensitive acquisitions.
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The provision of unique Value-Add USPs, resulting in significant improvement in sales velocity and profit margin enhancement.
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Risk mitigation initiative including A-Rated Insurance-Wrapped products protecting Equity Investment and Construction related risks.
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True Enterprise Value creation with Joint Venture Partnerships.
Urban Mutual’s typical capital investment is 90% to 100% of the total equity and debt contribution, with programmatic funding of up to $2,500,000 per project.
CAPITAL OFFERING
Urban Mutual has two primary funding mandates: Funding the Equity Gap (equity stack) between the First Mortgage and the Developer’s Equity, and providing First Mortgage Institutional Wholesale Lines for Real Estate Development Projects.
In most cases, Urban Mutual will fund the entire equity stack, similar to the commonly seenLimited Partner (LP)/General Partner (GP) arrangements used in larger-scale, residential and commercial development projects.
EMD PRODUCT
Urban Mutual’s Earnest Money Deposit (EMD) facility is a short-term equity offering that is now available to prospective qualified real estate developers.
Our EMD product can be used for all or part of the transaction’s required deposit, for as much as 10% of the purchase
price. It is typically provided for the ‘soft’ due diligence period, up to the time the seller requires the money to go ‘hard.’ The timing of the EMD may be extended, or rolled over into a Preferred Equity or Mezzanine Funding contribution to the project.
Urban Mutual’s typical EMD investment is 1% to 10% of the purchase price of the property, from $1,000 to $300,000 per project.
Utilizing our EMD facility replaces the requirement for developers and investors to outlay their own cash deposit funds (for just a nominal fee) until they are 100% sure they want to release the earnest money funds from escrow, and proceed unconditionally with the purchase. Using the EMD facility allows property buyers to secure properties without the need to draw on cash from their savings or investments, or obtain further debt by encumbering valuable equity in their other properties.
Bargaining Power: (A) Secure more deals by beating the competition with a stronger, ‘larger deposit’ offer; (B) May allow real estate buyers to secure a lower overall purchase price, therefore making this unique EMD service essentially cost free.
Timing: (24-48 hours) Secure a potential property acquisition.
Perceived Desirability: Provides the developer an exclusive due diligence time period to assemble more thorough underwriting pro-forma for their feasibility requirements, thus enhancing their ability to attract third-party investment capital and debt funding, when the deal is fully underwritten.
Best Use of Personal Capital: Leveraging third-party funding rather than disrupting the developer/investor’s own capital from other potential requirements, right until the time the investor is fully confident about moving forward, and going ‘hard’ with the closing of the property.
URGENT BRIDGE SOLUTIONS
Urban Mutual’s urgent bridge funding solutions, offer quick and easy finance for real estate investors and developers that need immediate capital for a variety of unforeseen circumstances that require creative, decisive, and rapid execution, such as time-sensitive real estate acquisitions and unanticipated expense overruns. Essentially, it is a short-term bridging finance solution, pending the arrangement and approval of alternative funding in orderto see the project through to completion.
Urban Mutual’s Bridge Funding Programs are typically shorter term duration, and are provided for 1 month up to 12 months to qualified borrowers.
Urban Mutual’s Bridge investment is between 10% to 100% of the equity stack contribution, and ranges from $25,000 to $500,000 on a per project basis.
INSTITUTIONAL FIRST MORTGAGE
DEBT FINANCE
Urban Mutual, in association with its Institutional Wholesale Debt partners, can provide multimillion-dollar Lines of Credit (LOC) to professional, high volume Fix & Flip developers.
Urban Mutual’s wholesale debt partners are best-in-class institutional funds, with the in-house resources to help our developer partners gain a significant edge, and expand their development production capacity by achieving a blended 100% LTV/LTC funding solution, in conjunction with Urban Mutual’s Preferred Equity and Mezzanine Funding Program.
Program Highlights:
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Access to blended first mortgage and mezzanine financing, for investor (non-owner occupied) based Fix & Flip Renovations, and New Construction Projects.
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First Mortgage credit lines up to $10,000,000.
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Local underwriting support, and professional risk management services.
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Annual Credit Pull with Seamless, Friction-Free Origination.
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Urban Mutual can ‘Credit Enhance’ the Developer Borrower (Co-Guarantor, FICO, Balance Sheet).
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Hands-on funding program and process flow, with in-house training and support.
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Nationwide (41 states).
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Friendly and responsive operations, and business development team to support your business.
At Urban Mutual, we are dedicated to offering wholesale funding solutions that improve our level of service to our developer and investor clientele. We do this by providing outstanding client care, through consistent and reliable communication. This mission to care, allows Urban Mutual to uniquely serve our customers with the exceptional service of a small boutique investment and corporate advisory firm, but the foundation and stability of a larger financial institution.
Our team has an unwavering commitment to our core values of honesty, integrity, and respect, which results in the delivery of highly desired, risk-averse, high quality products, and exemplary services.
When it comes down to it, we are in the business of helping our partners succeed, by providing a turn-key, one stop funding resource that maximizes their ability to successfully build their business. To do so, we stay up to speed with the market, keep our costs low and our actions quick, and support our client’s operations, methods and needs to help them grow and succeed above expectations.
