The Property

The Howard Street portfolio is a four-property residential rental portfolio in the
Raleigh/Durham MSA consisting of two single-family homes and two duplexes. All four
properties were built in 2023 by the current owner and positioned as a long-term hold
within their portfolio.

The portfolio holds a mix of 3-, 4-and 5-bedroom units with current market rents ranging
from approximately $1,995 to $2,495 per unit, positioning the portfolio well within a
durable renter segment. The portfolio provides long-term upside through continued rental
growth in a strong market.

The owner’s priority was not expansion. It was control. Execute a partner buyout, remove
personal guarantees, and stabilize ownership without injecting new capital.

The Challenge

The owner faced a firm deadline to complete a partner buyout and remove the partner from
personal guarantees across all properties. Existing debt originated as construction financing
and rolled into a permanent loan with a local bank. Leverage was elevated, leaving little
margin for error.

Several challenges emerged simultaneously:
• Lower valuations threatened the ability to retire existing debt
• The partner buyout agreement was slow to finalize, delaying execution clarity
• The existing bank was slow to complete title transfers on unrelated properties
• Appraisals on two properties came in approximately $100,000 below expectations

The Solution

The path forward required patience, flexibility, and lender willingness to solve problems.

We worked with a lender offering discretionary capital capable of navigating shifting timelines, valuation friction, and structural changes.

After multiple rounds of appraisal disputes, the appraiser was unwilling to waiver on values. When appraisal values held firm, we were facing a major shortfall on loan dollars requiring the owner to bring substantial cash to the table. We were able to work with the lender and pivot from a cash-out refinance to a rate-and-term execution with an exception to increase leverage based on owner experience in the market.

The deal was structured at 80 percent loan-to-value with taxes, insurance, and loan fees rolled into the loan to maintain a cash neutral outcome.

Despite delays outside the borrower’s control, execution was managed carefully to meet
deadlines.

The Results

• Loan Type: Rate and Term Refinance  
• Loan to Value: 80 percent  
• Term: 30 years  
• Interest Only: 10 years
• Cash to Close: $0  
• Status: Closed

Summary

For the Owner this transaction was about control, not capital.

Despite appraisal pressure and documentation delays, the borrower completed a partner buyout, removed personal guarantees, and secured long-term financing without injecting new equity.

The Howard Street portfolio refinance delivered ownership clarity, cash neutrality, and long-term stability.