In a market where lenders are pulling back on capital for commercial and multifamily deals, Rhine Legacy Capital remains firmly at the table. The boutique lender is providing short-term bridge loans to borrowers across the country.
Borrowers in the current market are working harder to find capital. When a borrower does find a lender who is willing to do a deal, they still have to run a gauntlet of risks to get a deal across the finish line. Does the lender have the funds to make the loan, and can they get that loan through their approval process? “Our niche as a balance sheet lender gives us very strong capabilities on timing, and it also gives us certainty of execution, which is a very big advantage if the tightening liquidity in the market continues,” says Samuel Kwadrat, founder and managing partner of Rhine Legacy Capital.
Throughout his career, Kwadrat has successfully financed over $250 million in loans, with momentum that has continued since he founded Rhine Legacy Capital in 2022. Funded by private capital, the company is actively lending on a wide range of property-related endeavors, with a focus on acquisitions on value-add and distressed properties. Rhine Legacy Capital also offers financing solutions for partner buyouts, complex loan scenarios and time-sensitive special situation financing requirements.
One of the things that sets the firm apart from other bridge lenders is the strength of its technology system, which paves the way for rapid loan processing. On average, its commercial property loans close within seven to 10 business days. Effectively, that technology platform streamlines workflows and communication with digital processes. Once a borrower applies for a loan, the processing of the loan moves to the online platform. In addition, every loan that Rhine Legacy Capital finances, from the application through servicing of the loan, is all handled internally.
Time is money
Speed is important in any situation, but it is especially critical where buyers need to move quickly to take advantage of investment opportunities. If a borrower has all of their documents ready, loan processing could take less than a day. What that means for borrowers is that when they apply for a loan they can get a term sheet within 24-48 hours, and a loan can go into underwriting within 72 hours. “Our product may be on the pricier side, but borrowers often use the speed to be able to get a little bit better pricing from the seller,” says Kwadrat.
For example, Rhine Legacy Capital recently provided a $3.25 million bridge loan for a borrower that had two warehouses under contract for purchase in Terre Haute, Indiana. It was a phenomenal single tenant, triple net lease opportunity for the borrower, notes Kwadrat. The borrower had a bank lined up to finance the properties. The problem was that he had a gap of 30 days between the closing date on the sale and the time the bank needed to finance the loan. “No private lender was able to come in to provide the financing, either because the borrower wasn’t located in Indiana; or because they didn’t believe that he had the bank lined up on the back end; or they didn’t want to give financing just for one month,” he says.
Rhine Legacy Capital stepped up to provide a short-term bridge loan. The buyer had already fallen out of contract on one of the properties. By putting more hard money down, he was able to get an extra 10 days on the purchase agreement, and with capital from Rhine Legacy, he was able to close on both properties within seven days. Within 30 days, the borrower was able to refinance both properties with a bank loan.
Another key differentiator for Rhine Legacy Capital is its transparency to borrowers.
“If a deal doesn’t fit with us, we’ll tell you right away it doesn’t fit. If you give us a package and we like the deal, we’ll move forward,” says Kwadrat. “Once a borrower gets a term sheet, they know that deal will close.”
In addition to its technology, Kwadrat and his team provide hands-on customer service. “We are always available for a phone call to answer any questions,” he says. “I used to be a broker, so I understand what it means working with the lender and trying to reach them for two or three days and they are MIA,” he adds.
Lending outside the box
Kwadrat sees more lending opportunities ahead, especially among borrowers who have a chance to buy assets where other investors couldn’t execute. As liquidity is tightening, many lenders, banks in particular, are only willing to do the best deals or loans that fit nicely in the box. Rhine Legacy Capital focuses on doing deals with experienced real estate investors, but it also understands that deals don’t always fit nicely into the credit box. “Our entire company is outside of the box. So, as a balance sheet lender we have flexibility in the deals we are willing to do, and we are willing to listen to the borrower’s plan for a property,” he says.
For example, Rhine Legacy Capital recently provided a loan to a borrower for a manufacturing property in Passaic, N.J. The borrower’s original loan was due, and he needed capital to complete a repositioning strategy. The new loan allowed the borrower to revamp the existing manufacturing space to create smaller, 2,000 to 3,000-square-foot units, making it attractive for new tenants and smaller businesses.
Rhine Legacy Capital likes working with investors and owners who truly understand the commercial real estate market and are willing to back up their confidence in a project with their own capital. Its typical loan size ranges between $1 million and $20 million, and the company is going up to 75% on loan-to-cost. “We like borrowers who have real skin in the game, understand how to leverage a property and understand how to value add a property correctly,” says Kwadrat.
As a private, boutique lender, the goal at Rhine Legacy Capital is to strike a balance between hedging against the risks inherent in the real estate industry and providing investors with the opportunity to achieve profitable returns. “At the end of the day, the most important aspect for us is that a borrower is able to show – ‘I’ve done this before. I know what I’m doing, and I will put my money towards what I’m saying I will do,’” says Kwadrat.
This article was produced by The Real Deal’s Brand Studio Team in conjunction with Rhine Legacy Capital. For more information about working with our Brand Studio Team please click here.