What the the terms for a guarantor to secure your loan?

[Anthony Barbato]

We are buying a $16M 10% cap rate assisted facility with 100% debt and the only outstanding piece is a guarantor for the 2nd position mezzanine financing.

Here is our capital stack:

80% 1st position non recourse debt - 4.5% floating over LIBOR interest

20% 2nd position recourse debt - 13% interest

Plus $2M in 1031 investor funds as working capital.

Considering the deal has 100% debt service, however there is enough working capital on the side lines to sufficiently cover debt service in case of poor cash flow until the refinance event, what is the cost range for having an investor come in as the guarantor on the 2nd lien?