Cetan Funds recently funded a loan for a Reverse 1031 Improvement Exchange in Eugene, OR. The borrower needed to start construction on a new single-family rental prior to closing the sale of an older rental property (i.e. the source of the 1031 exchange funds). Cetan Funds provided a creative solution: funding a residential construction loan, secured by both properties, to a business entity established by the exchange company to temporarily hold title during the exchange period. The loan was guaranteed by Cetan's borrower and the entity holding the newly built rental would be transferred into the borrower's name upon completion of the exchange. Shortly after funding the loan, the sale of the older rental closed, and the exchange funds were transferred into the project. Upon completion of construction and leasing of the property, Cetan will work with the borrower to ensure proper seasoning and a permanent financing solution for a long-term hold.

Loan Purpose

Residential Construction

Location

Eugene, Lane County

Loan Terms

$400,000 at 10.99% interest for 12 months