Common at this level, slower to arrange than people expect, and it fails on timing rather than on approval.
This page describes how the route is treated by the parties involved. Whether it suits any particular holding is a question for your own advisers. Contact the desk at Miami Dossier for the current position on any building we cover.
Borrowing against a portfolio rather than selling it is ordinary practice at this level. A lender advances against liquid holdings, the holding stays in place, and the proceeds fund a purchase.
Whether it is the right thing to do with any particular holding is a question for your own advisers, and this page does not answer it. What this page covers is how the parties in a Miami purchase treat it, which is a different question and one nobody publishes.
The short version: it usually gets approved, and it usually takes longer than the buyer assumed.
A conventional mortgage application underwrites income. Income that arrives unevenly, or is concentrated in one holding, produces a number that describes the borrower badly, and a two year lookback catching one strong year and one flat year makes it worse.
A line advanced against liquid holdings is priced on the assets instead. That removes the income problem, and it introduces a different one, since the advance rate moves with the value of what secures it.
The practical point for a property purchase is timing. These facilities take weeks to arrange, sometimes longer where the holding is concentrated or restricted. Where this is part of the plan, it starts before a building is chosen, not after a contract is signed.
Holdings subject to a sale restriction, a vesting condition, or a contractual limit on pledging are treated differently, and in some cases cannot secure a facility at all until the restriction lapses.
The answer is specific to the holding and to the lender, and it is not something to assume in either direction.
It is worth establishing early, because it changes the entire calendar. A route that only opens after a restriction lapses is a route with a start date, and deposit dates have to sit behind it.
A developer, an escrow agent, a title company and a receiving bank each apply their own requirements to incoming funds, and each can raise questions independently.
Funds advanced against a portfolio are ordinary wired dollars by the time they arrive, so this is usually straightforward. What is asked for is documentation of origin, which is a records exercise handled before the first wire rather than during closing.
The failure mode is almost always a missing document under time pressure, not a refusal.
A preconstruction purchase pays a piece at contract, a piece at groundbreaking, a piece at one or more construction milestones, and the balance at closing.
Those dates are negotiable before signing and fixed afterward. Where a facility takes weeks to put in place, that is a reason to have the conversation about dates before signing, not a reason to rush the facility.
Buildings also run late, with slippage of ~12 to 24 months common on large towers. A payment tied to a construction milestone moves when the building moves. One tied to a calendar date does not.
Borrowing against a concentrated holding links two things that were previously separate. Where the holding falls, the facility can require attention at exactly the moment attention is scarce. That is a well understood feature of the structure and it belongs in the decision.
Paying cash from settled funds avoids it entirely. So does waiting.
And where the property purchase only works if the borrowing works, that is worth naming out loud before a contract is signed rather than after.
The order most buyers use is backwards, and it is the reason otherwise sound purchases run into deposit dates they cannot meet. Contact the desk at Miami Dossier and we will tell you how a specific developer handles funding timing and what their escrow agent asks for. Where a question is legal, tax or compliance, we introduce you to advisers who handle that properly rather than answering it ourselves.
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Nothing here is advice about a holding, a portfolio, or whether to borrow against anything, and nothing here says to buy. It describes how the parties in a Miami purchase treat this route, which is information that is otherwise hard to get. Contact the desk at Miami Dossier for the current position on any building we cover. Where a question is legal, tax or compliance, we introduce you to advisers who handle that properly rather than answering it ourselves.
