This is a interestingly crazy deal for a large sized apartment complex in one of the fastest growing markets. Sometimes my eyes are bigger then my pockets so I could use some sound and objective opinions ;D
Built in 1978 and extensively rehabbed in 2004.
Exterior is completed done. New roofs, landscaping, added access gates, replaced stucko and wood, repainted everything. New Boiler system.
Currently the interior is in the process of being rehabbed. New tile floors, refinish cabinets/counters. New lighting/fans. All new plumbing fixtures. About half of the units are completed. Current renovation cost about $4250/unit.
An unused clubhouse was completely redone with TV’s and internet access. Has a fitness center and kitchen and could be additional income.
Here is where it get’s interesting.
It’s being offered with creative financing. Seller financing or lease to buy option. Terms are negotiable and payments may be able to be deferred until all rehab work has been completed.
To be continued with the numbers…
List price: $4,574,700
25% down : 1,147,500
4.5 acres
Seller financing: $3,427,200 @ 6.25%
Amort: 30 yrs
terms: Negotiable
Current NOI: $167,884 because of rehab work(loss to Lease and vacancies)
Pro forma NOI: $504,880 based off market rents and vancany rate of 7.5%
Current CAP: 3.67
Pro forma CAP: 11.04
Current capital Improvements are over $800,000. Professional management is in place and leased 5 new units this week. Onsite management is in place as well.
Also, units are individually metered and owner only pays for Gas.
I may be way over my head here , but this deal just sounds exciting.
Question: Would a commercial lender lend me the downpayment on a deal like this with the seller financing the rest?
Say the DP is about $1,000,000 @7%. The current NOI is $167,000. Would they take into account the other 80% the seller is financing(deferred payments) to figure out the dscr or would it be based on the $1,000,000 and current NOI which would around 2?..lol
god, I am a dreamer!!!
It all depends.
Is the seller willing to be subordinate to the Lender?
If not, this might fit as a mezzanine or 2nd loan.
Some cash of your own infused is generally a good thing, but this deal is interesting.
If you throw it up on my site as a loan inquiry, I’ll give it a whirl.
If for nothing else, it’ll get my creative juices flowing.
I will assume that you have money for appraisal and closing costs, etc.
Let me take a look at it and let’s see what we can come up with.
Jeff
Hey Jeff,
Thanks for the reply. What do you mean by subordinate to the lender?
Yes I have appraisal money and the closing cost are normally 2-4% of the loan, correct? If I had to come up with it, I definiltey could.
I’ll put an inquiry on your site.
Thanks,
Jordan
Jeff,
Just an FYI, I couldN’T decribe the deal in 300 characters or less so I put this link in the inquiry. Please let me know if you need anything else like the marketing package from the broker.
Jordan
Sounds like a cash cow. Don’t forget your friends when you become filthy stinkin’ rich. ;D Good luck.
Lightbeing,
No problem.
By the way, you can always email additional info to me. Just use as the subject inthe email the same as the project name.
I’ll take a look at it.
Let’s see if we can get creative enough to get it going for you.
Jeff
Thanks for your help Jeff
This one sure is interesting. It would be great if you can come up with something.
Just sent you an email.
Jordan
how did this deal turn out?
Still currently looking into this deal am oung others in the area.