How can I get a loan for this commercial deal

General Real Estate Investing
1

I have my eye on a Historical building to purchase for $129,000- It was a old boarding house/hotel with 2 storefronts. I want to convert the building into 10 condominium units. I need 1 million dollars to do the job and the asking price of the building. Once completed I can sell each unit for 200,000. That makes the value of the building 2 million. Plus this building is eligible for tax credits from state and federal totaling 45% of the 1 million. I need a hard money loan. It sounds so simple but I don’t have any funds of my own - but I thought that was what hardmoney was for. Maybe someone with some equity in another building of there own could invest in this- but how would I set this up? I have until Wed. to get this deal or he will accept an offer from someone else. If I had 2.5% of $129,000- I could hold the building for 90days to shore up my loans. Any suggestions? I need help I want to make some money-
I guess I would even take a partner if I knew where to find one. I know they will sell they are building a new hospital and renovating 4 blocks from this building. Please give me some ideas if anyone can!!! Thanks! Val

2

Valkie,

From a business standpoint, I would suggest contacting a broker that deals in hard equity/money. But even before that, you need to have a business plan or an executive summary that you can show the lender - something that will detail your plans for the property. And also show how much the property is worth now vs. how much it will be worth when you’re done. You’ll need to show them the feasibility of the job, how fast it will take to (you expect) rent out or sell out.

Enjoy,

3

I have everything you mentioned prepared. I have been shopping this around but I am running into a problem because I don’t have 20-25% of the deal myself- have heard I need 300,000 Private Money to act as my skin in the deal. I know I can presell once I get the first wrapped up to cover my end. I just need more time that I don’t have.

4

A couple problems I see is you have no money for a $1-2 million dollar deal. And you failed to mention your expertise in doing projects like this. I’m an investor but my opinion is this is going to be impossible for someone to fund this project based on the above 2 facts. JMHO.

5

I did a $1.2M deal with $100 and no credit. But, you will have to be creative and give something to get something. A partner is your best bet, but you need to get everything between you and him in writing immediately. Go hard money, commission a cheap architect to draw up the plans on deferred payments, etc.

6

I would not use an Architect if I did not have to. I would use an engineer exclusively. In Texas you do not need an Architect’s stamp on plans.

Engineer’s tell you how to build it an Architect is an artist. Thats my opinion! No offense to the Architect’s of the world.

7

There are lenders that will do construction/rehab loans with no money down. They base it on the future or completed value of the property. This is of course on a case-by-case basis. But it is possible to come in with no money down.

8

Velocity,

The product you are talking about is for residential construction/rehab properties. This project is a commercial condotel conversion. Not the same thing.

9

Sorry, I meant to say “commercial” construction/rehab loans.

10

ok,
Where can I find a partner or a lender who can do this… I thought I had one then he wanted tax returns, credit reports, etc… So maybe it wasn’t hard money? So should call this one dead?