Arriba Capital (Arriba) successfully closed a $2,374,000 loan for a family owned and operated Guest Ranch located in Buffalo, WY. The guest ranch concept allows travelers to participate in traditional ranch activities including horseback riding; fishing; hiking; and hunting while enjoying some of the comforts of home. The property comprises of over 2,100 acres of fee simple land and just over 5,700 acres of leased land from the state of Wyoming.
Challenge: The existing mortgage note was in a maturity default situation and the previous bank was unwilling to renew the loan. Although the “Guest Ranch” model had been operating successfully, it continued to be a fairly new concept for the owners and hadn’t realized its full operating potential. This concept required the owners to make significant renovations to the property including upgrades to the kitchen and housing amenities. Due to the uniqueness of the business and the historically tight cash flow, conventional lenders were not an option.
Solution: Arriba Capital worked closely with the client and the lender to help better understand the historical operating cash flow and the feasibility of the opportunity on a projected basis. Beyond the projected cash flow Arriba was in a position to justify the strong collateral position, which represented a 2:1 collateral coverage. Arriba was able to successfully secure a twenty-five year fully amortizing loan at Prime + 2.50%.