Real estate investment firm UC Asset has closed its first mortgage bailout deal, a business strategy that provides mortgage relief to commercial landlords hard-hit by the coronavirus pandemic while making a profitable investment.
The company announced making its first mortgage bailout transaction with a rental property with a market value of $850,000. According to UC Asset, the current owner was earning a profit from the property before the coronavirus outbreak but has not collected rent for the past five months, accumulating over $400,000 of unpaid balance.
In return for the exclusive right to acquire the property at $1 when the mortgage is paid off, UC Asset pays for the remaining mortgage balance and make a cash payment to reimburse the initial down payment to the current owner.
With small businesses forced to close during the pandemic and commercial landlords barred from evicting their tenants, UC Asset Managing Partner Greg Bankston said that the mortgage bailout program was a good deal.
“Under the current circumstance, the property owner is pleased their initial investment has been repaid and liability relieved. This is a much better outcome than selling the property in the current market,” Bankston said. “On our end, we are pleased to have acquired rights to the property using minimal cash and at a cost far below which we may have paid a few months ago.”
“Our new business model is about: helping local property owners while making good investments,” UC Asset founder Larry Wu said, “We believe if we choose wisely, with the right strategy, we will be able to help the community during this hard time and end up with a strong portfolio when this pandemic is over. We look forward to providing an impressive profit for our shareholders.”