Ed, any ideas? - Posted by Rich

Posted by Ed Garcia on December 15, 2000 at 10:50:42:

Rich,

Obviously you need a hard money lender, private investor, or partner if you want to hold on to the building. I would also consider seeing if I have a family member with good credit, who is willing to put their credit on the line on a well secured investment with a good return. They won’t need money, just credit. If I were to get a loan with them at lets say 10%, I would pay them 15% allowing them to have compensation for their exposure and efforts.

You could run an ad for an investor, or sell off part of the building taking on an investor partner. You could offer a reasonable amount of free rent or below market rent to your tenants, if they do their own TI’s( tenant improvements).

Rich, what ever you do, don’t give up now; you’ve come a long way. If you want to call me at (909) 944-0199 and go over this deal in more detail, you’re welcome to do it.

Ed Garcia

Ed, any ideas? - Posted by Rich

Posted by Rich on December 14, 2000 at 19:08:26:

My wife and I purchased a commercial property (in MD) over a year ago. 17,000 sq. ft on 4 floors. We need $40k to do the improvements necessary to open an antique / flea market mall…new heating system is the most needed at this point. We have a business plan, people waiting to rent space, but no funding. We owe $65k. The property should appraise for at least $150k (based on the recent sale of a similar property for $165k). This seems like a no brainer, but we can’t seem to get any banks interested. (c + credit). We’ve been trying to do the renovations out of pocket and have completed some, but we’ve run out of cash. One side of me says to sell it as is and move on, the other says to try and get it up and running and then maximize the profit potential with a viable entity. I like the latter better. I’m looking at borrowing $105k (possibly 3 year interest only with a balloon?), to pay off the existing mortgage and using the $40k to get the renovations completed. After the project is up and running, we could take a new first, or sell it. I’m looking at a 3 year turnaround at the most. We own 2 other properties (1 commercial, and 1 residential) that have just under 2 years remaining on option agreements, so I would have additional cash at that time, assuming the options are exercised. We also own another rental property that has about $30k in equity. Any suggestions are welcome. Lenders, brokers, feel free to weigh in.
Thanks. Rich