GIRA POLLI RESTAURANT

That said, here’s one deal that really had the embodiment of failure written all over it. Nevertheless, I took on the challenge for a couple of reasons, one of which was I knew the client and she was a friend in need! The client had been referred to me by an attorney I knew whose son went to the same grade school as my youngest daughter. The client was a woman in her late 70’s. She had dedicated 30 years of her life to literally building a restaurant facility and operating the business out of that building in the town of Mill Valley, CA. The establishment was known for its great Italian dishes and specialty roasted chickens.

This client and her husband, the chef, had imported an oven that was made in Italy for roasting chickens. The restaurant was known as ‘Gira Polli’ which means ‘roasting or turning chickens’ in Italian. The oven was so big that they had to build the restaurant around it. It was far too large to put it through the doorway of any existing structure where they wanted to be located. Together, this Italian couple created a popular restaurant and meeting place for more than two decades. Unfortunately, in the latter part of the third decade of operating this business, their business slowed down considerably. They were spending more than they were earning. They fell into serious debt and ended up in bankruptcy court.

At the time they were referred to me, they had been given a chance by the court to rearrange their debt. They were in Chapter 11. That meant they had the opportunity to repay their creditors and remain in business providing they could find a loan to bail them out. The time was 2014-2015. The client’s attorney asked me them to help them save their restaurant business and their restaurant property. They faced a total loss of their property and their business if they didn’t find a solution.

I remember trying every private money lender I knew as well as plodding through new lenders only to run into one roadblock after another. Either the lenders didn’t handle or want to be involved in working on deals where the client was trying to get out of bankruptcy. They also didn’t want to get involved in lending to restaurant operators or restaurant properties. I found out very quickly that lenders didn’t like restaurant properties in general. Restaurant owners were one thing but a restaurant business and the building it occupied was a different matter altogether! After approaching at least ten different lenders, I was coming up empty handed.

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As luck would have it, a commercial realtor I had known for many years referred me to a private money company that wasn’t on my radar just when I was running out of time to find a possible solution. This was a local lender who turned out to have investors that were willing to consider this situation. Here was a client in desperate need of a substantial amount of money that owned property of considerable value. This gave the private money lender the elements to offer a high rate of return for their investors’ money with sufficient protection should the client default. The property would easily cover any loss in a ‘fire sale’ situation. In other words, if the client were to default on the repayment of the debt, the lender could seize the assets and sell it for well below its value to obtain the funds to cover their clients’ investment.

Through the private lender, LRG was able to get the client approximately one-million, six-hundred fifty-thousand dollars. This was enough money to pay off all their existing debts per the court order . This pumped new life into the clients’ life and business. Further, the new loan bought them much needed time. They realized that if they couldn’t continue operating the business and remain in a positive cash flow situation, they would have a chance to sell the property for what it was worth instead of being subject to foreclosure. After about another year and a half of struggling, the clients realized they needed to sell the property and divest themselves from the constant debt burden they were in.

The property was in a very strategic location in Mill Valley. There was a Chase Bank, a shopping center and medical offices on the other 3 corners of the four-way intersection where this restaurant property resided. The intersection saw an average of 50,000 cars pass through every day. With the help of their attorney and a realtor, the clients sold their property for three million dollars. The woman of this couple and I became very close friends as a result of this experience. She was very grateful for my unrelenting assistance. Our relationship would bring us back together over another real estate challenge that she faced a few years later.

LAKE COUNTY LAND LOAN

One of the more standout transactions that I accomplished in the past two decades was a land loan for a client that was referred to me by a broker who I hired when I was a Manager at the CTX Mortgage company. He and I developed a close friendship. We stayed in close touch even though we had taken different paths in the real estate mortgage business.

This was another client who was on the verge of losing his ownership interest in his property to his partner who owned fifty percent of it. The Partner told our client if he didn’t buy him out he would foreclose on him and become a one-hundred percent owner of this property. The partner wanted to retire and was actively cashing out of some of his properties. The property was approximately 150 acres of undeveloped land in Lake County, just north of the Napa county wine region. The property was earmarked to develop 380 homes on 102 acres and build several commercial properties on the remaining 48 acres. My client had invested two million dollars of his own money in the property. Once again, I was faced with a land loan on only partially entitled land with a client facing foreclosure if he didn’t pay off his partner’s share of ownership.

The difficulties of this deal were far greater than the prior land loan I closed for the property located in Pacifica. This property was in a more remote area of northern California known as Lake County. The property was not completely entitled for what the client wanted to build and the plans for the development were also incomplete. I worked on this loan for what seemed like endless months of searching for a lender. The way I found the lender that eventually provided my client the loan is, by itself, a classic study of asking anyone and everyone I knew in the business for a referral.

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One of my sources was a residential mortgage broker who, from time to time, refers deals to me. I asked him if he knew anyone for this particular loan. He referred me to another broker he knew who he thought might know someone for it. I called that person. He referred me to yet another broker who he thought might have a connection for this deal. Talk about a ‘broker chain’?! Well, that’s what it took. The third broker in the ‘who do you know chain’ referred me to the lender that actually made the loan to my client. I started working on this loan request in March of 2016. The loan closed in March of 2017. There was some down time in between that twelve month period and there were times when the deal looked like it wasn’t going to happen. Sheer persistence made it happen! With a loan of approximately four million dollars, my client took full ownership of the property and covered the closing costs including my fee and an equivalent fee for my friend who brought me the deal and helped maintain consistent communication with the client. We celebrated with a dinner at a local restaurant. It was a huge success for the client not to mention LRG!

At this point I have chronicled some of my more memorable and hard-to-do transactions over the first decade of LRG’s business venture into the complicated world of commercial real estate financing. I consider this Part One of a Two-part series. As this goes to press, I have begun work on Part Two. The second decade of LRG’s mortgage success stories will consist of more unique situations like the ones you’ve read about here but all very different in their circumstances. I hope you’ve enjoyed some of the intrigue and last minute achievements that, without them, the clients may have had very different outcomes. More to come!

Meet Mark Robbins

Mark Robbins has pioneered non-recourse financing for IRA investors since leveraged financing became available to the public through a small bank in the Midwest in 2004. Since that time only a few select banks even offer these loans. He has established and maintained relationships with these lenders over the past twenty years.

Mark has obtained non-recourse loans, per IRS regulations, for numerous real estate investors in more than 30 states including Hawaii. Mark is a preferred provider for many of the IRA servicing companies including the Equity Trust Company, uDirect IRA, the Provident Trust Group, Entrust and many other IRA custodial and administrative providers for clients who require non-recourse financing for their IRA funded real estate investments.

Mark graduated from New York University in Bronx, New York with a B.A. in History and Western State College of Law in Fullerton, California with a Juris Doctorate (J.D.). Mark is an entrepreneur and has operated several different businesses over the past forty years including a division of a major commodities investment firm, his own hi-tech executive search company and presently a commercial real estate mortgage brokerage company known as Lending Resources Group Inc. that he founded in 2007.

He has been a real estate investor and developer having designed and built four homes since 1982. He became a mortgage banker in 2002 with Bank of America and went on to work for CTX Mortgage, a division of the home building company, Centex Corp., in Dallas. Mark was recruited to start an in-house mortgage division for a popular townhome development company in San Francisco in 2006. That firm dissolved in the wake of the financial crisis in 2007=2008. During his tenure in mortgage banking, Mark has generated more than $120 million in residential and commercial mortgages for homeowners and investors nationwide.

If you have any questions about how to invest your IRA in real estate, please contact Mark at 415-309-1803 or by email: [email protected]. You can also reference his website at: www.lendingresourcesgroup.com.