Credit Evaluation School Instructor eBook - Oct 2023

People:

Mark McGwire Inc. Real estate holding company Holds five hotels within local trade territory 100% owned by Mark McGwire Rental income paid to holding company from hotels Hotel income derived from operation of hotel DSCR of 0.92x 30/60/90 past due status 4/3/1 ‐ All within the past 12 months Term note to purchase fifth hotel

Purpose: Payment:

Protection:

Unlimited and unsecured personal guaranty Mark McGwire Guarantor’s financial statement shows limited liquidity and declining financial wherewithal Hotel is unprofitable and does not cash flow for second consecutive year

Problem: Prospects:

Proven history with borrower in hotel industry Hotel in prime location