Can I get a loan to carry the purchase/remodel?
Purchase price is $5,000,000
Remodel costs are $2,000,000
This will bring the total cost up to $7,000,000
Appraised value will be around $16,000,000
I want to get 1 long-term loan to do this of $8,000,000 to allow for any delays in work or problems. Anyone have experience in this type of deal? What/how to do it?
1. Get property appraised first. You may be off on your calculations, but get it appraised first to see if your deal is viable.
2. Next if the valuation is high enough, contact a bank to get a reconstruction loan. This will be a loan for aquisition wrapped with a construction loan. The construction loan part will be variable and paid out of a drawing account payable at stages of the reconstruction. The stages and estimated costs will be estimated at the beginning of the loan process defining what defines completion of a stage and how much money will be released.
3. Upon completion the loan will convert to a permanent with the entire amount amortized over the target period ie 25yr.
You will want to get a good flag and mgmt company, but more importantly you are going to need to carry some working capital as you should not expect to break even the 1st year especially considering the size of loans.
If you are interested you can contact me directly as I've consulted on similar deals. I can arrange Gen Contractors as well as permits and financing as well as help you with some techniques to minimize your exposure in the deal and maximize your ROI.
Good luck either way. Remember 90% preparation in these types of complex deals. Your financial structure will dictate your success.
www.dnainvestments.com I forgot to post my website for you. Good luck on your project. http://answers.yahoo.com/question/accuse_write?qid=20060612132608AAksUc5&kid=NbUvWjG.VDftdVnNzrdO&s=comm&date=2006-06-16+08%3A56%3A13&.crumb=
if you have that mush money you need a money manager not advice at Yahoo answers.
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