{"id":2986,"date":"2025-08-29T08:46:19","date_gmt":"2025-08-28T23:46:19","guid":{"rendered":"https:\/\/wi-th.com\/?p=2986"},"modified":"2025-08-29T08:46:20","modified_gmt":"2025-08-28T23:46:20","slug":"building-auction-loans","status":"publish","type":"post","link":"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/","title":{"rendered":"Building Auction Loans"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#%EA%B1%B4%EC%B6%95%EB%AC%BC_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C%EC%9D%B4%EB%9E%80\" >What is a construction auction loan?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#1_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C%EC%9D%98_%EA%B8%B0%EB%B3%B8_%EA%B5%AC%EC%A1%B0\" >1. Basic structure of an auction loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#2_%EC%A3%BC%EC%9A%94_%EC%A2%85%EB%A5%98\" >2. main types<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#3_%EB%8C%80%EC%B6%9C_%EC%A2%85%EB%A5%98%EB%B3%84_%ED%8A%B9%EC%A7%95\" >3. Features of each loan type<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#1_%EA%B2%BD%EB%9D%BD%EC%9E%94%EA%B8%88%EB%8C%80%EC%B6%9C_%EC%A6%89%EC%8B%9C_%EC%9E%94%EA%B8%88%EB%8C%80%EC%B6%9C\" >(1) Meridian Balance Loan (Instant Balance Loan)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#2_%EC%82%AC%ED%9B%84%EB%8C%80%EC%B6%9C_%EC%86%8C%EC%9C%A0%EA%B6%8C_%EC%B7%A8%EB%93%9D_%ED%9B%84\" >(2) Post-loan (after ownership is acquired)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#3_%EB%B8%8C%EB%A6%AC%EC%A7%80%EB%A1%A0_Bridge_Loan_%EB%8B%A8%EA%B8%B0_%EC%9E%90%EA%B8%88\" >(3) Bridge Loan (short-term funding)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#4_PF%C2%B7%EC%82%AC%EC%97%85%EC%9E%90_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C_%EB%B2%95%EC%9D%B8%C2%B7%EC%83%81%EA%B0%80%ED%86%A0%EC%A7%80\" >(4) PF - Business Auction Loan (Corporate - Storefront\/Land)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#4_%EB%8C%80%EC%B6%9C_%EC%A1%B0%EA%B1%B4\" >4. loan terms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#5_%EC%A0%88%EC%B0%A8\" >5. procedure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#6_%EC%9C%84%ED%97%98%EC%9A%94%EC%86%8C_%EB%8C%80%EC%B6%9C_%EA%B1%B0%EC%A0%88%ED%95%9C%EB%8F%84_%EC%B6%95%EC%86%8C_%EC%82%AC%EC%9C%A0\" >6. risk factors (reasons for loan decline\/limit reduction)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#7_%EC%9C%A0%EC%9D%98%EC%82%AC%ED%95%AD\" >7. Notes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#8_%EC%8B%A4%EC%A0%9C_%EC%98%88%EC%8B%9C_%EC%8B%9C%EB%AE%AC%EB%A0%88%EC%9D%B4%EC%85%98\" >8. Simulate a real-world example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#9_%ED%99%9C%EC%9A%A9_%EC%A0%84%EB%9E%B5\" >9. Utilization strategy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/wi-th.com\/en\/finance\/building-auction-loans\/#10_%EC%9A%94%EC%95%BD\" >10. summarize<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"%EA%B1%B4%EC%B6%95%EB%AC%BC_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C%EC%9D%B4%EB%9E%80\"><\/span>What is a construction auction loan?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Borrowing money from a financial institution using a building (including a house, storefront, or land) that you won at auction as collateral.<\/li>\n\n\n\n<li>Mainly <strong>Based on the winning bid<\/strong>and because of the nature of the auction, they are sold below market value, resulting in a lower **LTV** than a regular sale.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C%EC%9D%98_%EA%B8%B0%EB%B3%B8_%EA%B5%AC%EC%A1%B0\"><\/span>1. Basic structure of an auction loan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Purpose<\/strong>: Paying the balance on a property you won at auction or securing post-auction funds.<\/li>\n\n\n\n<li><strong>Differences<\/strong>:\n<ul class=\"wp-block-list\">\n<li>For regular trades, the <strong>Bank review after confirmation of purchase and sale contract + deed<\/strong> \u2192 Loans.<\/li>\n\n\n\n<li>The auction is a <strong>Court auction \u2192 Before ownership transfer<\/strong>Need money for \u2192 loan structure is different.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Collateral Valuation Criteria<\/strong>\n<ul class=\"wp-block-list\">\n<li>View appraisal, winning bid, and market price together <strong>By lowest amount<\/strong>to calculate the loan limit.<\/li>\n\n\n\n<li>(Example: Appraised value 500 million, market price 4.5 million, winning bid 3.5 million \u2192 base 3.5 million).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_%EC%A3%BC%EC%9A%94_%EC%A2%85%EB%A5%98\"><\/span>2. main types<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Bid money loan (balance loan)<\/strong><\/li>\n\n\n\n<li><strong>Renovation and remodeling loan (additional operating funds)<\/strong>\n<ul class=\"wp-block-list\">\n<li>The winning bid is vacant or has squatters <strong>Brightness Cost<\/strong> Required.<\/li>\n\n\n\n<li>If your building is in poor condition, you'll also need funds for repairs and remodeling.<\/li>\n\n\n\n<li>Some financial institutions offer them as a package.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Post-lending (meridian funding)<\/strong>\n<ul class=\"wp-block-list\">\n<li>After you've already paid the balance on your own and taken ownership, <strong>How to get a second mortgage<\/strong>.<\/li>\n\n\n\n<li>Interest rates may be lower than balance loans.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_%EB%8C%80%EC%B6%9C_%EC%A2%85%EB%A5%98%EB%B3%84_%ED%8A%B9%EC%A7%95\"><\/span>3. Features of each loan type<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_%EA%B2%BD%EB%9D%BD%EC%9E%94%EA%B8%88%EB%8C%80%EC%B6%9C_%EC%A6%89%EC%8B%9C_%EC%9E%94%EA%B8%88%EB%8C%80%EC%B6%9C\"><\/span>(1) <strong>Cash Advance (Instant Balance Loan)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Target<\/strong>: A person who has won a court bid and is about to pay the balance.<\/li>\n\n\n\n<li><strong>Features<\/strong>: The lender gets some collateral security because the auction deposit has already been paid.<\/li>\n\n\n\n<li><strong>Conditions<\/strong>:\n<ul class=\"wp-block-list\">\n<li>LTV: 40 to 701 TP3T (depending on property type\/location\/credit rating).<\/li>\n\n\n\n<li>Interest rates: typically 5-91 TP3T (lower for banks, higher for capital\/savings banks).<\/li>\n\n\n\n<li>Term: 1-35 years (long-term for homes, short-term for commercial\/land).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Required documents<\/strong>Bid acceptance decision letter, bill of sale, ID, proof of income, bid deposit receipt.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_%EC%82%AC%ED%9B%84%EB%8C%80%EC%B6%9C_%EC%86%8C%EC%9C%A0%EA%B6%8C_%EC%B7%A8%EB%93%9D_%ED%9B%84\"><\/span>(2) <strong>Post-loan (after ownership is acquired)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Target<\/strong>: pay the balance out of your own pocket and need additional funds after the ownership transfer is complete.<\/li>\n\n\n\n<li><strong>Features<\/strong>: Treated like a normal plinth, but evaluated based on the winning bid.<\/li>\n\n\n\n<li><strong>Conditions<\/strong>:\n<ul class=\"wp-block-list\">\n<li>LTV: 60 to 801 TP3T available (bank-insurer oriented).<\/li>\n\n\n\n<li>Rates: 4-7% range (closer to the prime rate).<\/li>\n\n\n\n<li>Pros: Low interest rates, long term.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Utilization<\/strong>: Temporary financing of auction funds (debentures, etc.) \u2192 post-auction loans.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_%EB%B8%8C%EB%A6%AC%EC%A7%80%EB%A1%A0_Bridge_Loan_%EB%8B%A8%EA%B8%B0_%EC%9E%90%EA%B8%88\"><\/span>(3) <strong>Bridge Loan (short-term funding)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Target<\/strong>If you need to pay for brightness, remodeling, or clearance in a hurry.<\/li>\n\n\n\n<li><strong>Features<\/strong>: Short-term high interest rates (often over 10% per annum).<\/li>\n\n\n\n<li><strong>Duration<\/strong>: 3 months to 1 year.<\/li>\n\n\n\n<li><strong>Utilization<\/strong>: Charter\/rental matching after clearing, and replacement as normal.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_PF%C2%B7%EC%82%AC%EC%97%85%EC%9E%90_%EA%B2%BD%EB%A7%A4%EB%8C%80%EC%B6%9C_%EB%B2%95%EC%9D%B8%C2%B7%EC%83%81%EA%B0%80%ED%86%A0%EC%A7%80\"><\/span>(4) <strong>PF - Business Auction Loan (Entity - Storefront\/Land)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Target<\/strong>Bidders on commercial real estate such as storefronts, buildings, land, etc.<\/li>\n\n\n\n<li><strong>Conditions<\/strong>:\n<ul class=\"wp-block-list\">\n<li>In loan underwriting <strong>Lease Yield - Development Value<\/strong> Evaluation.<\/li>\n\n\n\n<li>LTV 40 to 60%.<\/li>\n\n\n\n<li>Interest rates: 6-12% (higher for private financing).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Utilization<\/strong>: land auction leads to construction loan \u2192 development type investment.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_%EB%8C%80%EC%B6%9C_%EC%A1%B0%EA%B1%B4\"><\/span>4. loan terms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Collateral Valuation Criteria<\/strong>: Based on the lower of the auction appraisal, the winning bid, and the market price.<\/li>\n\n\n\n<li><strong>LTV<\/strong>Lower than a conventional mortgage (40 to 701 TP3T levels, depending on the institution).<\/li>\n\n\n\n<li><strong>Interest rates<\/strong>: Depends on creditworthiness, condition, and use, usually between 5 and 91 TP3T.<\/li>\n\n\n\n<li><strong>Loan Term<\/strong>: Ranging from 1-year short-term (in the form of a bridge loan) to 30-year long-term (for homes).<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_%EC%A0%88%EC%B0%A8\"><\/span>5. procedure<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Winning the auction \u2192 Deciding on the sale permit \u2192 Paying the deposit<\/li>\n\n\n\n<li>Court notice of balance due date<\/li>\n\n\n\n<li>Apply to be considered for a financial institution (or private lender) loan\n<ul class=\"wp-block-list\">\n<li>Submitting the winning bid, the winning bid, the bill of sale, payment history, and credit documents<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Execute balance loan \u2192 Pay to court<\/li>\n\n\n\n<li>Transferring ownership + placing a lien<\/li>\n<\/ol>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_%EC%9C%84%ED%97%98%EC%9A%94%EC%86%8C_%EB%8C%80%EC%B6%9C_%EA%B1%B0%EC%A0%88%ED%95%9C%EB%8F%84_%EC%B6%95%EC%86%8C_%EC%82%AC%EC%9C%A0\"><\/span>6. risk factors (reasons for loan decline\/limit reduction)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>ViolationsConstruction<\/strong>\n<ul class=\"wp-block-list\">\n<li>Illegal expansion, use violation \u2192 no loan or greatly reduced limit.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Senior rights exist<\/strong>\n<ul class=\"wp-block-list\">\n<li>Liens, statutory liens, senior tenants \u2192 risk hedging by banks.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Brightness issues<\/strong>\n<ul class=\"wp-block-list\">\n<li>Squatter-tenant eviction issues \u2192 Shunned by financial institutions.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Winning bidder creditworthiness<\/strong>\n<ul class=\"wp-block-list\">\n<li>Banks won't lend to you if you have a low personal credit rating \u2192 you have to go to capital and savings banks, P2P.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Object Types<\/strong>\n<ul class=\"wp-block-list\">\n<li>Commercial properties, office buildings, and land are valued lower than homes.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_%EC%9C%A0%EC%9D%98%EC%82%AC%ED%95%AD\"><\/span>7. Notes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>ViolationsConstruction<\/strong>: High likelihood of loan denial. Illegal expansion, illegal change of use, etc.<\/li>\n\n\n\n<li><strong>Tenant-Reputation Risk<\/strong>Having an occupant is a loan underwriting disadvantage (requires a clearance lawsuit).<\/li>\n\n\n\n<li><strong>Rights relationships<\/strong>: Unable to borrow or significantly reduced limits if there are senior liens, liens, statutory liens, etc.<\/li>\n\n\n\n<li><strong>Liquidity risk<\/strong>: Auction loans have higher interest rates and stricter terms than regular mortgages \u2192 Funding plan required.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_%EC%8B%A4%EC%A0%9C_%EC%98%88%EC%8B%9C_%EC%8B%9C%EB%AE%AC%EB%A0%88%EC%9D%B4%EC%85%98\"><\/span>8. Simulate a real-world example<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Situation<\/strong>: Appraised value 500 million \/ market price 4.5 million \/ bid price 3.5 million apartments<\/li>\n\n\n\n<li><strong>Conditions<\/strong>: Apply bank LTV 70% \u2192 3.5 billion \u00d7 70% = 70% <strong>245 million available for lending<\/strong><\/li>\n\n\n\n<li><strong>Pay the balance<\/strong>: 35 million deposit paid, 315 million balance \u2192 245 million loan + 70 million equity required.<\/li>\n\n\n\n<li><strong>Post-loan conversion<\/strong>: Bank post-lending execution after closing \u2192 up to 280 million.<\/li>\n\n\n\n<li><strong>Investor strategy<\/strong>: If we hit 300 million chartered after Mingdo \u2192 Almost recovered equity + loan repayment structure.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_%ED%99%9C%EC%9A%A9_%EC%A0%84%EB%9E%B5\"><\/span>9. Utilization strategy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Real users<\/strong>\n<ul class=\"wp-block-list\">\n<li>Buying your own home: Meridian balance loan \u2192 Long-term mortgage.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Investors<\/strong>\n<ul class=\"wp-block-list\">\n<li>Market arbitrage: low bid \u2192 remodel \u2192 sell.<\/li>\n\n\n\n<li>Charter leverage: Minimize equity by matching bids to charters.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Entity-Business<\/strong>\n<ul class=\"wp-block-list\">\n<li>After winning the auction for a profitable building, connect PF \u2192 Run a rental business.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Investors<\/strong>: Bid below market value, remodel \u2192 convert to rental\/sale \u2192 pay off loan.<\/li>\n\n\n\n<li><strong>Real users<\/strong>: Use a balance loan to buy your own home if you don't have enough money.<\/li>\n\n\n\n<li><strong>Legal entities<\/strong>: Proceed with rental business after winning auction for profitable real estate \u2192 Loan in the name of the corporation.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_%EC%9A%94%EC%95%BD\"><\/span>10. summarize<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Auction loans are more demanding and have higher interest rates than regular mortgages.<\/strong><\/li>\n\n\n\n<li><strong>LTV ranges from 40 to 701 TP3T<\/strong> \u2192 Equity capitalization required.<\/li>\n\n\n\n<li><strong>Violations - Architectural - Rights-of-Way - Clarity Issues<\/strong>must be pre-reviewed.<\/li>\n\n\n\n<li><strong>Investors can switch from balance loan \u2192 clarity\/remodel \u2192 post-loan<\/strong> Strategize a lot.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>\u2705 The winning bid is lower than the market price <strong>Ensure a margin of safety<\/strong>which is why investors utilize it. 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