Illustrative structure · Conversion bridge · California

$9.2M Boutique hotel → assisted living

A California operator wants to buy a boutique hotel and convert it to a residential care facility for the elderly (RCFE). The loan has to cover the purchase and the conversion work, and then carry the property through licensing and lease-up.

Illustrative example. Structures shown are illustrative examples of how these programs are typically arranged. They are not client testimonials or guarantees of results; actual terms vary by borrower, asset, and market. This is not a closed transaction and not an offer or commitment to lend.

Why this structure

  • A conversion has no trailing income to underwrite, so a bridge lender sizes on cost and on the plan: purchase price, conversion budget and the operator's experience.
  • Construction-style bridge loans are modeled at up to 80% of cost over about 30 months, with interest paid from a reserve inside the loan.
  • California RCFEs are licensed by the Department of Social Services under Title 22, so licensing milestones belong in the loan timeline from the start.

Program parameters used

Taken from the sizer's assumptions, reviewed 2026-10-31. Programs change by notice; an advisor confirms current rules before you rely on any figure.
Bridge max LTC
80%Modeled assumption, reviewed 2026-10-31.
Bridge term
30 months
Bridge spread
SOFR + 4.50%Indicative; set by the lender.
Min debt yield on cost
6.5%
Lender fee / exit fee
1% / 0.5%Indicative.
HUD 232 stabilized occupancy test
85%Modeled on the current HUD handbook, reviewed 2026-10-31; confirm with a HUD lender.
HUD 232 refinance max LTV / min DSCR
80% / 1.45xModeled on the current HUD handbook, reviewed 2026-10-31; confirm with a HUD lender.

Timelines are typical ranges after a complete file and are subject to lender approval, appraisal, title, and diligence. They are not guaranteed.

How it typically unfolds

  1. Step 1

    Confirm entitlement and licensing path

    Zoning or use-permit approval from the city and the RCFE license path are checked before the purchase closes.

  2. Step 2

    Budget the conversion

    Hard and soft costs, contingency and the interest reserve are sized together so the loan covers the whole plan.

  3. Step 3

    Close the bridge

    The lender funds as lender of record. Corin does not hold or move loan funds.

  4. Step 4

    License, lease up and refinance

    After licensing and stabilization, the property is re-underwritten for a takeout such as HUD Section 232 or a bank loan.

What a lender will look at closely

  • Local approvals and fire and life-safety requirements for a change of use.
  • The RCFE license timeline and the operator's licensing history.
  • Conversion cost overruns and schedule slippage against the bridge term.
  • Whether the stabilized property meets the takeout lender's occupancy and income tests.

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Other representative structures

All rates, terms, and sizing are indicative estimates for discussion only, are not a commitment to lend, and are subject to lender underwriting, appraisal, credit approval, and program guidelines in effect at application. Corin Commercial arranges loans as a licensed California real estate broker and is not the lender. Corin Commercial, Inc. · Real estate broker, California Department of Real Estate · CA DRE Corp. License #01522444 · Designated Officer: Neeli Khanna