Posted by Dwayne R on March 24, 2000 at 11:11:24:
NT
Any tips? 1 P.O., 9 REIs, $1.1million - Posted by Rolfe K Mpls/StP
Posted by Rolfe K Mpls/StP on March 24, 2000 at 01:23:32:
Met a seller who has 11 somewhat beat-up properties for sale. I suggested I’d consider buying all 11 if the price were right, if he’d carry some financing, and if I were able to to secure the necessary financing. I’ve completed 10 renovations since I started in 1/98, sold 5 and kept 5. This deal feels like a nice next step.
Seller is selling (1031, actually) to move onto suburban commercial REI. Seller gave me the name of the mortgage broker who is handling the financing for seller’s commercial endeavor. I assumed the broker would have ample motivation to help his commercial client sell the 11 properties, and I was right. If this goes, the Mortgage Broker will originate sellers commercial deals as well as financing my deal on the 11.
Here’s what I want. I am a redeveloper, so I’d like to aquire all 11 on a line-o-credit (or?), secure construction financing to renovate all, and refinance all. I’ve crunched the numbers - it works. For renovations, my usual modus operandi is to obtain a 75% to 80% refinance mortgage which covers my aquisition and renovation, yet allows a good cash flow.
Seller is willing to take a 10% carryback. The mortgage broker feels he can get me the line of credit and 65% construction financing. Mortgage L/V’s will be 80% of the After Renovation Value.
Leases are month to month. I’d stagger the renovations to avoid being stretched too thin. Total purchase price would be about $1,050,000.
Any thoughts on how I should proceed with the lender?
Thank you for your time! Rolfe