The whole structure, piece by piece.
For years, an Arizona auto repair operator wrote a rent check every month for the building his shop ran in.
He was not new to the work. Twenty-seven years in the trade. Three locations. Two of them already running with real revenue. The third ran out of a building he rented on a busy, signalized West Valley corner. His customers knew the intersection. His name was on the sign. The building worked because he worked.
Then the seller decided to sell.
The moment most owners lose
Here is where most of these stories end. The owner calls his bank. The bank likes the deal fine. It also wants three years of returns and a committee’s blessing. Months, not weeks.
Sellers rarely wait months. The building goes to a buyer who can close, the owner keeps writing rent checks, and the moment passes. Not because the deal was bad. Because the clock ran out.
What it actually took
This deal closed in weeks, in May, on the seller’s timeline. Here is the whole structure, piece by piece.
Piece one: a private first loan of about $750K, roughly 65% of the property’s value. Sized so the deal stands up, not stretched to a maybe.
Piece two: the seller carried 20% of the price as a subordinated second. The seller wanted the sale. Carrying part of the price made the timeline work for everyone.
Piece three: the buyer brought 15% in his own cash. Real skin in the game, sized to reality instead of to a bank’s formula.
Twelve-month bridge. Interest only. And the way out was mapped before the loan was made: a conventional refinance takes the bridge out at maturity. Private capital wins the close. The bank still gets the long loan. Everyone does what they are good at.
Why this deal underwrote cleanly
A bank checklist struggles with a deal like this. The timeline is short. The buyer is an operator, not a portfolio. The structure has three pieces instead of one.
Judgment underwriting reads it differently. The buyer had been running his business inside this exact building as a tenant. He knew the roof, the bays, the traffic count, the customer base. His operating income was real and documented. His incentive to keep the business healthy and his incentive to service the loan were the same incentive.
We underwrite the operator, the building, and the exit in front of us, not a checklist. Kenwood has underwritten Arizona real estate this way for 30 years, first-position deeds of trust, business-purpose loans on commercial and investment property.
What changed for him
Nothing about his monthly obligation is new. He was already paying it. It used to be rent that built his landlord’s equity. Now it services his own loan and builds his own.
He owns the corner his customers already know. When the bridge refinances, he will hold a bank loan on a building he controls, at the address his business spent years making valuable.
The pattern is bigger than one shop
We are seeing this across Arizona right now. On our desk as this article goes up: a restaurant operator buying the space their restaurant already runs in. Same logic. The operator knows the building better than any appraiser ever will, because they work in it every day.
And the same thinking runs past the purchase. Owners with free-and-clear commercial property are putting that equity to work as business-purpose capital for next locations and equipment. Builders ready for ground-up construction get capital that advances before work begins. One lender, every stage.
If this is you
If you run your business from a building someone else owns, the next building to sell will not wait for a slow file. Know your structure before you need it.
Call (480) 783-8800, or start with the Quick Quote form on this site. Tell us the building and we will walk the same three pieces for your deal.
Kenwood Mortgage Investments, Inc.
7950 East Redfield Road #110, Scottsdale, AZ
MB 13866 | NMLS 170223
