Who is a candidate for UC Assets mortgage partnership?
Any commercial property owners who have issue to keep up with their mortgage payments may participate into our mortgage partnership, and have their monthly mortgage obligations transferred to us. Particularly, we aim to help commercial property owners in metro Atlanta area, who have outstanding mortgage balance between $500 thousand to $5 million, and whose property income have been impacted by Covid-19 pandemic.
How does a "mortgage partnership" work?
Under a mortgage partnership, UC Asset will become your business partner, and will take over all mortgage payments on concerned property (including any past-due payments). In return, UC Asset will be entitled to receive a fair share of the future income generated from the concerned property. The terms and conditions are flexible, and may generally be more favorite to property owners than other options such as "hard money" loans.
Is it a private loan or "Hard Money" loan?
No it's not. Actually it is not a debt program at all. The commitment from UC Asset will be represented as investment into your property, and you are not obligated to pay UC Asset back, even if things may go south.
Why can it be a better option for my property?
Although it may not be always the case, it is very likely that a mortgage partnership with UC Asset will be less risky and have more upside for distressed property owners, than other options available on market.
Let's say you bought a $5 million property 5 years ago and you have paid $2 million (including your down payment and aggregated mortgage payments) and have an outstanding mortgage balance of $3 million. When the property is not generating enough income to cover mortgage payments, you usually have to either keep paying mortgage out of your own pocket, or choose to sell the property. The first option can be too risky, because you may drain out your cash reserve (as much as $3 million in our example) before the property will revive to generate any income. The second option can be too conservative, because you may have to sell the property undervalue and take a permanent loss (in our example if you sell at $4 million you will permanently lose $1 million). Even if you can sell your property at original purchase price, i.e., $5 million, you will only retrieve $2 million after paying off mortgage balance, and you will lose all the upside of future appreciation of the property value.
Working with UC Asset you will have a partner who commits to help you pay all the outstanding mortgage, $3 million in our example, and dramatically reduce your risk of cash squeeze. Meanwhile, you will keep your share of net equity in the property, in our example you will keep $2 million/$5 million = 40%. You will be entitled to 40% of its future income and 40% of its property value appreciation. If the property value doubles to $10 million after 5 years, your $2 million will also double to $4 million (40% of $10 million).