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Author Topic: ANY HELP//// CAN IT BE DONE???  (Read 14925 times)

Offline real estate 001

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ANY HELP//// CAN IT BE DONE???
« on: August 28, 2007, 09:19:04 am »
 :cool     HELLO  all this hard money talk    I have a person whom is looking at a posible hard money , as his credi is  poor  about 560 to 570  fico.  WHAT is the deal is this  he has found a  resort that is for sale by owner  in Oregon  for  1.5mill !!   THIS  resort has a value of 2.0 mill !! HE has  about 300k of his own monety to put in to this like a down payment AS well the sellers are willing to take a second . HE is looking  for around  900k  in hard money for   1 to two years ??

 THE place needs some updateing   but is making money /// the cabins are rented full 8 months out of the year  for 100 a night  and there are 6 of them !!!   THERE is more to this resort as well  it makes  over 100k a year after expenses !!

 THE  owners are only selling as they are getting to old to run the place  ,and they want to travel


 MY question here is do any of you think he could get a hard money loan and if so  what kind of terms ???   AS well  with who ?? AS he would need a fast close  with in 30 to 60 days  if possible ??

   THANK you for the help  :beer

Offline Rich_in_CT

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #1 on: August 28, 2007, 10:09:57 am »
I'm no expert but it seems to me that with the guy putting down $300k cash and the sellers taking a second he's in a better position than most when borrowing, especially being at 45% ARV.

Offline Frontier Investing

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #2 on: August 28, 2007, 10:10:37 am »
:cool     HELLO  all this hard money talk    I have a person whom is looking at a posible hard money , as his credi is  poor  about 560 to 570  fico.  WHAT is the deal is this  he has found a  resort that is for sale by owner  in Oregon  for  1.5mill !!   THIS  resort has a value of 2.0 mill !! HE has  about 300k of his own monety to put in to this like a down payment AS well the sellers are willing to take a second . HE is looking  for around  900k  in hard money for   1 to two years ??

 THE place needs some updateing   but is making money /// the cabins are rented full 8 months out of the year  for 100 a night  and there are 6 of them !!!   THERE is more to this resort as well  it makes  over 100k a year after expenses !!

 THE  owners are only selling as they are getting to old to run the place  ,and they want to travel


 MY question here is do any of you think he could get a hard money loan and if so  what kind of terms ???   AS well  with who ?? AS he would need a fast close  with in 30 to 60 days  if possible ??

   THANK you for the help  :beer

Is the value at 2 million or 20 million? A Hard Money Lender that your referring to would need the money to cross referenced with something.

Does the resort have any real estate, equipment ect that is valued at $900,000?

Yes it can be done but you or the buyer needs to do more work; a lot more work. On another note $100,000 a year with a purchase price of $1,500,000 equals a cap rate of 6.6 percent, not exactly a great deal.
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Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #3 on: August 28, 2007, 10:33:10 am »
 :cool   NEED to do alot more work ???   IAM confused here what more work ??

 AS well it is  2 mill  ///  THERE is 2 acres this resort sits on  it has a gift shop   coffee // sandwich shop   and 4 pull through pads for rv s     

 AND a owner/mangers home  with office !!!

    WHOM would any one say he should go to  to get this hard money from ???  AS  was posted it is a 45% deal  and owner taking a second

Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #4 on: August 28, 2007, 10:38:08 am »
 :cool    IAM sorry     i forgot to say the  100k a year is after every bill  on the place is paid for the year !!  MAKING a profit of 100k a year is not  so bad  is it ??  AND with the owners living on site they have all there bills paid as well  minus there personal stuff   food and the like  :beer

Offline Frontier Investing

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #5 on: August 28, 2007, 11:02:28 am »
:cool   NEED to do alot more work ???   IAM confused here what more work ??



 AS well it is  2 mill  ///  THERE is 2 acres this resort sits on  it has a gift shop   coffee // sandwich shop   and 4 pull through pads for rv s     

 AND a owner/mangers home  with office !!!

A Hard Money Lender will loan based on assets; nothing else. Sometimes with good credit, experience and cash reserves a Hard Money Lender will loan on the prospective value of a building. To get a loan your going to have to verify all the assets the resort has to even get a lender to give you the time of day, of course this is assuming that the appraisal is on the resort itself and not the 2 acres?

   
WHOM would any one say he should go to  to get this hard money from ???  AS  was posted it is a 45% deal  and owner taking a second IAM sorry     i forgot to say the  100k a year is after every bill  on the place is paid for the year !!  MAKING a profit of 100k a year is not  so bad  is it ??  AND with the owners living on site they have all there bills paid as well  minus there personal stuff   food and the like

I know your thinking a 45% LTV is a great loan but its not, especially to a hard money lender. The assets are not verified again the LTV is going to mean nothing to a Hard Money Lender. Another point that you havnt addressed; how is the owner going to payback the loan? With his credit a refinance is not going to be possible especially because it will be based on the business.

Making $100,000 per year is a mute point. Your saying if I purchase a 20mm dollar building and get a net profit of $100,000 thats acceptable? Thats not the way it works. I'm willing to bet you or the buyer haven't even factored in a possible mortgage you will have to get on the property to payoff the HML which would eat in to all that $100,000.

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Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #6 on: August 28, 2007, 12:49:31 pm »
 :cool     HEY     where  are you getting this 20 mill  at??  I SAID IT ONCE I SAID IT TWICE  IT IS 2 MILL NOT @) MILL !!!!


  AND  as well i said the updates will incresae the income  !!!! AND with the old loans  paid off this in turn frees up more money !!! MAKEING the  income more as there will be less going out !!!  THE yearly income will jump a lot  in two years  think  updates  and just the normal run of things  they go up !!!!  AND two years of paying on the hard money loan will look very very good to any refinance person //bank !!!


 AS well the apprasial  on any thing is   for the land and all of  the  cabins    gift shop all of this !!!! 


 IF you have some one doing your apprasial and they are only apprasial  is on the land then it is not aful meal deal !!!  AND if you paid for it you  were screwed out of your money


 I hope this makes things more clear for some  and not cloudy for others ??  :beer

Offline Frontier Investing

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #7 on: August 28, 2007, 01:30:06 pm »
:cool     HEY     where  are you getting this 20 mill  at??  I SAID IT ONCE I SAID IT TWICE  IT IS 2 MILL NOT @) MILL !!!!


  AND  as well i said the updates will incresae the income  !!!! AND with the old loans  paid off this in turn frees up more money !!! MAKEING the  income more as there will be less going out !!!  THE yearly income will jump a lot  in two years  think  updates  and just the normal run of things  they go up !!!!  AND two years of paying on the hard money loan will look very very good to any refinance person //bank !!!


 AS well the apprasial  on any thing is   for the land and all of  the  cabins    gift shop all of this !!!! 


 IF you have some one doing your apprasial and they are only apprasial  is on the land then it is not aful meal deal !!!  AND if you paid for it you  were screwed out of your money


 I hope this makes things more clear for some  and not cloudy for others ??  :beer

I was just an analogy for the 20mm. What I was trying to say to you is that you can not just detirmine $100,000 is a good living and it makes it acceptable to loan officers. You need to derive that from other methods such as using Cap Rates.

You don't seem to want to take my advice so I'll just put this as simply as possible and move on-

- No Hard Money Lender is going to lend on a prospective business
- No Hard Money Lender is going to lend on unverified structures
- A Hard Money Lender will loan up to 75% of the purchase price or value; which ever is lower. Not subject to repairs.
- A Hard Money Lender will be concerned with the credit, income, assets and debt ratio because they want to be paid back .
- Staying in a Hard Money loan for 2 years is a very very bad idea.

In simplest terms-

 ANY HELP//// CAN IT BE DONE???

No, not with a Hard Money Lender. Try getting a few partners or private investors that will participate for some of the profit. If you can guarantee an exit strategy by refinancing in a few months then revisit Hard Money, I can even point you in the right direction. Im not trying to be a jerk I've just gone through this all before and Im trying to save you some time, Good Luck.


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Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #8 on: August 28, 2007, 02:12:26 pm »
 :cool  THIS is a working  (not a going to be ) resort  making money now !!!    NOT some time  after the buy !!!!   AS well  there are hard assets   at and on this resort !!!    WHAT i was asking   was this   


 IF this person was going to put  300k down and the seller was willing to take  a second  could he get a hard money loan for the rest  of the deal  could it be done ???  AS the person needing the loan has bad credit  is why he is looking at hard money !!   IT would not have to be for 2 years this is just the # he used to me !! Iam sure it would be more like  a  year . AS this place the property is  going up in value  at the rate of 25 % per year  and has for the last 5  years


  NOW can you or any one answer this question ??



   

Offline Frontier Investing

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #9 on: August 28, 2007, 02:26:36 pm »
:cool  THIS is a working  (not a going to be ) resort  making money now !!!    NOT some time  after the buy !!!!   AS well  there are hard assets   at and on this resort !!!    WHAT i was asking   was this   


 IF this person was going to put  300k down and the seller was willing to take  a second  could he get a hard money loan for the rest  of the deal  could it be done ???  AS the person needing the loan has bad credit  is why he is looking at hard money !!   IT would not have to be for 2 years this is just the # he used to me !! Iam sure it would be more like  a  year . AS this place the property is  going up in value  at the rate of 25 % per year  and has for the last 5  years


  NOW can you or any one answer this question ??



   


For arguments sake, if the project has verified assets a Hard Money Lender will loan off the purchase price-

Purchase Price: $1,500,000
Buyer DP: $300,000
Seller Second: $300,000
Hard Money Loans: $900,000 52 Percent LTV

So yes you could find someone to touch that. You don't want to finance it as a business but as assets instead, include everything that is being bought that could be resold. If the appraisal is done on the value of the business its worthless.
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Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #10 on: August 28, 2007, 03:19:24 pm »
 :cool  thank you     the apprasial would be on the  whole  asssets

 SO now we have come e long way to get a simple answer  again thank you !!!  could you point me in the direction of some one / THIS would be that i could tell this person about   for a loan ??

Offline Frontier Investing

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #11 on: August 28, 2007, 05:16:14 pm »
PM sent.
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Offline REI4ROI

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #12 on: August 28, 2007, 07:08:40 pm »
You will need to speak to a commercial hard money lender---if the NOI is only 100K per annum, the debt service on a 1.5 million dollar loan will be in excess of 156K...

I don't have any confidence that this will be funded based upon the info being shared---would need to know more to determine feasability.

Regards,

Scott Miller
RE Investment Advisor
Weichert Realtors
[email protected]

Offline real estate 001

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #13 on: August 29, 2007, 12:23:49 am »
 :cool    WOW  i am so confused here as to how a question can get so  messed up ???


  THE loan would not be for a 1.5 mill   the loan would be for  about   800k to maybe 900k !!!!   

 AS the buyer is putting 300k  down   and the seller has agreed to take a second for any amount that would make this work !!! 

 IS this more  understandable ???   

 THE sellers are just getting to old to run  the place and keep it up

Offline REI4ROI

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Re: ANY HELP//// CAN IT BE DONE???
« Reply #14 on: August 29, 2007, 12:55:10 am »
The property cash flows within acceptable debt service ratios at 800K-900K (assuming 100K per annum is the NOI and not the gross rents)---I check the guidelines in the morning to see if there are allowances for a 70/10-80 CLTV configuration (70% Lender 1st + 10% Seller 2nd).

Regards,

Scott Miller

:cool    WOW  i am so confused here as to how a question can get so  messed up ???


  THE loan would not be for a 1.5 mill   the loan would be for  about   800k to maybe 900k !!!!   

 AS the buyer is putting 300k  down   and the seller has agreed to take a second for any amount that would make this work !!! 

 IS this more  understandable ???   

 THE sellers are just getting to old to run  the place and keep it up
RE Investment Advisor
Weichert Realtors
[email protected]

 




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