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Updated about 5 years ago,
Loan Guarantors for Apartment Acquisition
I have several outside investors willing to provide a decent chunk of the equity for the acquisition of two multifamily apartment properties next to a major university campus. They do not, however, want to be underwritten by the bank and do not want to get into any personal guarantees. Even the investors who have committed to this project were initially hesitant with respect to providing tax returns, PF statements, signing guarantees, etc.
I know I can avoid my investors being underwritten by the bank by using a GP/LP ownership structure. The issue is that my company and I do not have the balance sheet (yet) to secure this level of a loan. I should also note that I am aware that Agency debt avoids the personal guarantee issue, but the principal of our property management company has significant influence with the local banking community. He has used this influence to secure very favorable financing for us on previous deals. Aside from the personal guarantee requirement, the terms he able to secure are even better than what the Agencies are offering. As such, I feel compelled to stick with the local community bank route.
My question is this...are there "Professional Guarantors" out there who are willing to guarantee loans on deals and have their balance sheets underwritten in exchange for a fee or a piece of the equity? If yes, any suggestions along the lines of locating these professionals is greatly appreciated.
Thank-you in advance for any feedback and-or advice.