Need Help ? 1.2 Mil Commercial Loan

General Real Estate Investing
1

Hello everyone. Found this forum using google and must say I have found some good information. But, I still do need help with a commercial loan for $1.2 mil. Below is the specs

Land purchase Cost: $900,000.00
This includes 1 + ac. of commercial property with permits for 12000 Sq Ft. broken up to 8 stores. Plus 1+ ac of residential property with proper permits for a 3 lot sub divsion.

All surveys have been completed. environmental study completed and approved.

Land clearing Cost: $50,000.00
Currently a building on site that needs to be removed.

Residential construction costs for 2 of the lots. homes will be around 2500 sq ft. each: $250,000.00

I would be able to repay 1/2 of the loan " $600,000.00 within 12 months. The remaining balance of the loan " $600,000.00" I would like to finance over 15 years.

About me: I do not currently own any real estate. I am a fully licensed and insured general contractor with my own business for the last 2 years. Well respected in my community. Pay all my bills on time every month. Have credit lines with all major credit card companies over $25,000.00 per card. My credit score is currently 742. I have had car loans befor that were settled befor the full loan term. I have never had any type of bad credit.

Now for the problem: I have limited funds for a down payment. I could if all else fails uptain 5% total out of pocket. Which would be $60,000.00 cash.

Could anyone tell me of any companies that would be willing to issue this loan.

I thank you in advance for your time.

2

Just Wanted to add:

Value of total property " AS IS " above befor any improvements: $1,435,000.00

Thank you.

3

This is a possibility but will be expensive…

4

If you could. Please let me know the costs.

Thank you.

5

feel free to email me direct with any futher questions…

6

The biggest question I would have is,

Who are your tenants going to be. Have you worked this out yet?

Are these 8 single tenant stores or a strip mall or a combination of both?

The single most important aspect would be who the tenants are going to be. Have you worked all this out yet?

Also you can get a bridge loan at 65% ltv for $942,500(based on the $1.4 million estimate that you gave).

or you could get a 50% land loan.

7

Here is what you will be looking at for typical commercial bridge or residential development financing:

50% LTV of as is value of land = $717,500 for purchase

up to 70% of cost to install infrastructure & to build units

Expect to have to pay the lender $10k for non-refundable due dilligence fee + 1% to 2% of loan amount as commitment fee up front.

As closing additional 1% to 2% of lender points will be take + an exit fee (in lieu of equity) of 3% to 10% depending on the lender + broker fees & closing costs.

Loan terms will usually be max of 24 to 36 months, with interest only payments due during this time. Rates will likely be around 13% first year & 15% to 16% the second year.

You maybe able to obtain higher LTV’s on the purchase (up to 60% max) if you offer the lender an equity stake in your project, but honestly most lenders are not interested at this time due to their forcasts of how the residential market is starting to look.

Oh, and if you have not put together a marketing plan/exit strategy and do not plan to obtain presales early on … expect to receive lower LTV’s.

Good luck.