Deal at a Glance
| Loan Amount | $5,355,000 commitment ($5,161,000 funded at closing + $194,000 earnout holdback) |
| Property | 70-unit apartment complex, recently renovated |
| Location | Arlington, Texas (Dallas-Fort Worth metro) |
| Transaction | Refinance (takeout of private bridge loan) |
| Lender Type | Regional bank |
| Rate | 6.0% fixed |
| Term / Amortization | 5 years / 30-year amortization |
| Leverage | 65% of as-is value, 60% of stabilized value |
| DSCR | 1.30x, with a 1.15x stress test at rate + 1% |
| Closed | Q2 2026 |
The Deal That Walked in the Door
We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this deal came from a Utah-based investor group we work with on multiple Texas (TX) properties. The asset: a 70-unit apartment complex in Arlington, Texas, dead center in the Dallas-Fort Worth metroplex between Dallas and Fort Worth. They had bought the property with a private bridge loan from an Arizona hard money shop, executed a substantial renovation, and were leasing the improved units at meaningfully higher rents. The business plan was working. The debt was not: the bridge loan carried a double-digit cost of capital, and every month it stayed in place ate into the value the renovation had created. The eventual takeout came from a regional bank willing to structure around the property's in-between stabilization.
Commercial Lending Solutions specializes in multifamily refinance and bridge-to-bank takeouts for investors across Texas and nationwide, and this Arlington assignment fit that focus exactly.
The complication was timing. The property was mid-stabilization. Occupancy and collections were climbing but had not yet hit the full stabilized picture a bank underwrites to. Wait a year and any bank in Texas would do the loan. Refinance now and most banks would cut proceeds to what current income supported, potentially leaving the owners short of the bridge payoff. We were not willing to accept either answer.
What Made It Hard
- In-between income. Trailing income reflected the renovation period, not the improved rent roll. A lender sizing purely off historicals would have come up short of the bridge payoff.
- A multi-entity ownership structure. The property was held by three LLCs in a tenant-in-common structure, backed by several individual investors and family trusts. Every guarantor added underwriting complexity.
- Real prepayment math on the incumbent loan. The private lender's payoff needed to be timed precisely, and the takeout had to close before extension fees kicked in.
How We Ran the Process
Trevor Damyan, a California-licensed real estate broker (DRE #02244836), ran the deal from Los Angeles through our lender network and generated four competing proposals: two California-headquartered regional banks that lend actively in Texas, a national credit union, and an agency lender quoting a small-balance execution. The agency quote was non-recourse but underwrote the trailing income hard and cut proceeds. The credit union was cheap but slow. The two banks fought it out, and the winner separated itself by solving the in-between-income problem with structure instead of a haircut:
- $5,355,000 total commitment at 6.0% fixed, a 5-year term, and a 30-year amortization, with a 0.5% loan fee and a 5-4-3-2-1 declining prepayment schedule
- $5,161,000 funded at closing, sized to 65% of as-is value, enough to retire the bridge loan in full
- $194,000 held back as an earnout, drawable once year-end operating statements show the property covering debt service at 1.30x on the stabilized rent roll, with two earn-out windows tied to fiscal year-end 2026 and 2027 income
- Underwritten to 1.30x coverage with a stress test at 1.15x assuming rates 1% higher, the bank's protection for a rising-rate world
- Relationship pricing, with the 6.0% rate tied to the borrowers maintaining deposit accounts at the bank of roughly 10% of the loan amount
The loan closed in June 2026 and the Arizona private lender was paid off in full against their final payoff statement.
"The property was not fully stabilized yet, but the business plan clearly worked. We built an earnout structure so the owners were not forced to choose between refinancing early at reduced proceeds or riding out the expensive bridge loan."
Why We Won This One
The earnout is the lesson here. Owners mid-stabilization often think they face a binary choice: refinance early at reduced proceeds, or ride the expensive bridge until the property fully seasons. A well-structured earnout splits the difference. The bank funds what today's numbers support, $5,161,000 at 65 percent of as-is value, commits to the full $5,355,000, and releases the $194,000 balance when year-end operating statements prove 1.30x coverage. The borrowers stopped the bridge-loan bleeding immediately without permanently leaving proceeds on the table. We pushed for two earn-out test dates, fiscal year-end 2026 and 2027, so one soft quarter would not forfeit the holdback.
The competitive process is what created that structure. The four proposals differed by hundreds of thousands of dollars in proceeds and meaningfully on rate, prepayment flexibility, and deposit requirements, and none of them started with an earnout on the table. That came out of negotiation, telling the winning bank exactly what it would take to beat the field. The bank that won was not the one with the flashiest headline rate. It was the one willing to build the loan around where the property actually was in its life cycle.
Worth noting for other out-of-state owners of Texas multifamily: the sponsor sat in Utah, the property sat in Arlington, the broker sat in Los Angeles, and the winning bank was headquartered in California with a Texas lending footprint. Commercial credit is national. The right lender for a Dallas-Fort Worth apartment deal is frequently not a Texas bank at all.
Is This Structure Right for Your Deal?
If your value-add multifamily property is leased up or close to it and you are still sitting in bridge or hard money debt, the takeout market wants your deal. We arrange permanent loans, bridge-to-perm takeouts, and multifamily bridge loans from a network of more than 1,000 capital sources nationwide.
Apply for refinancing or call us at 310.708.0690 to talk through your property.
Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.
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