Hello to all, and thanks in advance for any advice. Here’s the deal:
I have an option on a single-family ranch in a very nice Philadelphia suburb. It is my mom’s place, and she will be retiring soon and relocating. The catch on that part of it is, the timing is indefinite, so all talk about actual numbers here is premature.
But as it stands today, I could probably get the place for $400k. The plan is to add a second story (at least) and various other upgrades, and sell after the renovations for maybe $950k. (I will involve a realtor and an architect to pinpoint everything to get to that price point.) The neighborhood will definitely bear that sale price, btw…there are multi-million dollar houses close by.
So here’s where I need advice:
I am a contractor, in business for 23 years, so I know my stuff on the renovation end. But the project will be so large that I will have to bring in subcontractors, I can’t do it all “in-house.” Best of all, I have no money and my credit sucks! Haha…exaggerating a bit, but not much!
Mom wants all cash, that is, I’ll be treated like any other buyer other than I get first dibs. A traditional mortgage will never be offered to me, so I’m thinking private money.
Questions:
Is private money feasible in my situation? (First timer, large project, etc.)
Will they lend at 65% of future (post renovation) value? I need that extra money over purchase price to carry the renovations.
Am I crazy to do such a large first deal?
Are there any other ideas for how to do this?
How should I structure it, I mean sort of corporation-wise. Seperate my construction company from the purchasing company for the puposes of getting potential draws, or anything else?
Thanks again!