Case Studies

The Short-Term Bridge

Higgins Beach
  • An owner of a multi-unit apartment building at Higgins Beach needed to refinance the property to access equity in a divorce settlement.
  • Because the property was only partially rehabbed at the time, his conventional bank, Camden National Bank, was unable to underwrite the refinance.
  • Camden National Bank called on Maine Capital Group to provide short-term funding, and thereby the necessary liquidity, for legal matters and also to complete the renovation.
  • As planned, Camden National Bank provided take-out financing within 12 months once the property was fully renovated and could appraise at its full value.

 

The Flip

  • Whyte Acquisitions has developed a successful business model buying distressed properties, renovating them and reselling at market.
  • The company aligned with a real estate broker who represents FNMA in Southern Maine, giving it access to a vast portfolio of bank-owned properties.
  • Given the highly-competitive environment surrounding this type of real estate, the ability to quickly secure choice properties and close without financing contingencies is essential. Traditional banks are too slow.
  • Whyte and Maine Capital Group worked together to establish a streamlined process that provided rapid access to capital and met our internal underwriting requirements.
  • Using this process, Whyte Acquisitions has secured more properties at lower purchase prices due to the strength of a cash offer with quick closings.

 

The Historic Redevelopment

  • Augusta East Redevelopment Co (AERC) purchased the former Maine General Hospital building in Augusta in 2011, and began the lengthy process of changing its use to a state-of-the-art multi-tenant facility.
  • After securing $14 million for the project, developers Kevin Mattson and Severin Beliveau determined short-term bridge financing, albeit higher interest than banks, gave them the flexibility needed to perform tenant fit up and other smaller elements of the project.
  • AERC used up to 20 separate bridge loans annually to accomplish small projects. In many cases, the pricing structure was not ideal and the process was cumbersome.
  • Maine Capital Group approached AERC with a different idea: by analyzing all of the real estate holdings of the AERC principals, we were able to create a fixed collateral package that allowed for a single closing of a line of credit. The line is sizable enough to meet AERC’s needs and still be heavily collateralized (55% LTV). This capital source is more streamlined and efficiently priced, as well as less time consuming – allowing AERC to focus on driving the overall project to success.

 

The Spec Home Builder

  • DWL Builders of Exeter, NH, is a high-quality custom home builder in Southern Maine and NH. The company currently has several projects in various phases of completion in both states.
  • Because of a past issue involving a bankrupt development during the crash, DWL is not yet a candidate for traditional bank financing. In addition, banks are generally unenthusiastic about spec home construction, an essential element of DWL’s model home marketing strategy.
  • Maine Capital Group created an initial funding structure that includes leveraging the overall value of the subdivision to allow infrastructure work and up to two spec homes built at the same time.
  • After more than a year’s success in our portfolio, DWL is now a stronger candidate for bank financing at lower rates. We are now helping to assemble different options.

 

The Family Estate

  • A woman was the sole trustee of a Living Trust holding a family estate on 10 acres of land when her father died. Because of upkeep costs and taxes, she decided to liquidate the property.
  • For the property to be ready for market, there were necessary repairs and taxes to be paid – in addition to basic carrying costs. The woman didn’t have cash and had past credit issues, but the property was owned free and clear and worth more than $1.2 million.
  • Her real estate broker referred her to Maine Capital Group. She was able to borrow $100,000 on a 6-months term against the value of the property to make the repairs and pay taxes before the property went on the market.
  • By using a Maine Capital Group private capital loan, this woman was able to list the property at a much higher price and maximize the family asset.