HML financing with a cashout in SOCAL???
Hello everyone!!!
Just joined so I can ask a question.
There is a very nice piece of land in southern California (OC AREA) which is for sale.
My partners and I want to develope a new home on the land, but need financing.
The land price is around $11 million for about 9 acres.
We estimated home construction at $6 million for about 18,000 sq ft.
We can pay cash for the land. But we would like to cash out at about 95% after purchasing the land. (within 30 days)
Then we will still need the $6 million for home construction.
What can you guys recommend is the best way to get financing?
Again, thank you in advance everyone.
(Side Note: Jason Vogler are you still on this site? I tried calling you but number is disconnected)
Hi,
Wow, you have a lot more gut's than I do!
California is in huge financial troubles right now with record unemployment and an unstable economy. I would guess in the $22m to $24m sales price range there are almost no buyers.
I think that is why you don’t see a bunch of properties like this being developed!
As for your question, you are only going to be able to get about 30 to 50% of the puchase price of the land financed, and in order to get a construction loan you will need a full set of plans and permits with this thing ready to go!
If this property had plans and permits already done and you were looking for capital you might be able to get $10m to $12m for land and construction.
This leaves you invested $5m to $7m plus carrying cost’s out of pocket.
This is probable a high risk project in this market.
There are probable much better projects around the country with less risk and better returns.
Good luck to you!
GR