In theory this seems like it should work. I have found a 40 unit apartment building for sale (unoccupied) in Michigan for $75,000.00 it needs about $450k worth of rehab to get it fully up to code. It will need an additional investment of $35,00 in soft cost such as taxes and an old water bill. The area is near a university and should easily rent for $650 per apt on average. I can see 85-90% occupancy as a very wasy goal for the first 18 months and then more thereafter considering that there is a shortage of affordable or moderate rate apt units in the area which is swarming with young medical professioonals and college students.
Thats the deal I am looking at…
As far as getting the financing lined up, I have bad credit so I can’t walk into the bank and get funding. I can approach a commercial lender and apply for a nonrecourse loan however I think I will only get about 70-80% arv from this source. I figure the best way to close the gap in funding (besides putting in my own cash which by the way doesnt exist) is to get a little owner financing and the rest from a private lender.
But where do you find the mythicval private lender who would want tpo partner on something like this even when the numbers look fantastic? Is there something I should put in the local newspaper. on Linkedin, etc, or is there a better way to do it?
You can go to the county records and do a search for “Mortgages” or “Deed of Trust” depending on your state of course. After a while you should starte to see either an LLC or a persons name more than once. That’s an investor.
Obviously, start seeing the name of the same company more than once chances are they are investors. So go look at the records so you can see who’s doing deals in your area. Hope this helps.
You also want to be building your investor list, so that when you do run into an opportunity, you are ready to pull the trigger and play ball. Hope this helps.
High potential property, but a little difficult at first in terms of having the money needed for the property. Besides what torojd has suggested which are good ideas, why not find a friend or a relative interested in investing? That way, you don’t have to pay for interests in loans etc. and the agreement is limited to the people whom you trust. This is quite a big project as we are talking about a commercial property so I guess the trust issues and high interest should at least minimize your problems in this case. Good luck!
If you have a proven track record in real estate, you can find many investors with tons of money. I was once told by the man in charge of real estate investment at the Bechtel family office – the company that owns a big chunk of commercial properties in Los Angeles – that he can invest as much as $250 million in one deal. His minimum investment amount was $30 million. He was interested in hotels and resorts as well as shopping centers – no residential properties. That was four years ago. I do not know if Bechtel now invests in housing.
Last year we supplied one company in Los Angeles a database of 250 family-owned investment companies. The company raised $35 million from those families.
Most of these investors want to know if you have a strong background and if you can successfully execute the business plan. They want to be sure you know what you are talking about. If you can speak confidently, you surely can get money from them.
I’m currently expereincing the same thing. I put a property under contract and the buyer offered me over the my asking price to carry a note for 12 months. They have a hard money lender ready to fund them if they can come up with the funds.
I never heard of a deal like this before and wanted to know if it was possible and legal.
That’s a lot of money but I think you’ll find one that is interested to invest. How about asking a relative or a friend maybe they’ll be willing to be your partner. Hope you’ll be able to find investor as soon as possible. Good luck!