Ed, I'll take that room now! - Posted by Rich

Posted by JohnBoy on January 04, 2001 at 16:18:22:


Would just doing a refi based on as is value work? If I understood this deal correctly the property would appraise for a lot more than what is owed on it the way it sits. So rather than try to do a refi for rehab, just refinance the building based on the current as is appraised value. Couldn’t he do it this way and get cash out if the LTV would exceed his current mortgage balance? What kind of a LTV could he get on just refinancing this based on “as is” condition and forgetting about the rehab thing?

Also, if he could just refi the thing he may even be able to get the current lender to discount their note to get it paid off. After all, they did just tell him they were no longer doing loans in his state at this time…so maybe he could get a decent discount on this and get what he needs by just refinancing?

I think the main purpose of his rehab he wanted to do was to prep things to conform to his tenants needs. So the building the way it sits should appraise for enough to get a better LTV by just doing a refi with some cash out?

Just thinking out loud??? Talk to me baby…am I dreaming here or couldn’t this work for him? :slight_smile:

Ed, I’ll take that room now! - Posted by Rich

Posted by Rich on January 04, 2001 at 11:54:51:

Hi Ed,
Well, I just got off the phone with my bank/mortage company that told me they were going to see if they could put something together for me after the first of the year. It is now obvious that I was being fed a line of b.s. According to the person I just spoke to, they aren’t even set up to do any loans in Maryland at this time. They plan to be in the near future, but that doesn’t help me now. The woman suggested I contact a finance company and see if they would refinance it, or do a blanket mortgage. So, I’m back to square one. Do you do loans in Maryland, or would you rather have me, my wife, and our 18 month old son move in with you? I’ve seen the weather reports from out there, and I think I’d like to be in 80 degree weather instead of 15 degree weather anyway.
Any ideas?
Thanks. - Rich

Re: Ed, I’ll take that room now! - Posted by Ed Garcia

Posted by Ed Garcia on January 04, 2001 at 14:57:45:

You really know how to put pressure on a guy. LOL

Yes Rich, I do loans in Maryland, but unfortunately not rehab, construction, or hard money at this time.

Rich, you know it’s not like the lender you’ve been talking to is the only game in town. You need to jump in the phone book. I wouldn’t leave any stone unturned. I know that there has to be a lender in your area that will finance rehabs or do construction.

When we talked, my message was for you to work on your presentation. Having your ducks in a row sort of speak when presenting your deal. Being prepared to answer questions and verify what would be the obvious. You know, that if you were in California, I could do your deal.

If you need to call me, and want to go over the details of your presentation again, or the selling points of your loan, feel free to do so.

Ed Garcia

Re: Ed, I’ll take that room now! - Posted by JohnBoy

Posted by JohnBoy on January 04, 2001 at 16:49:34:

Some more thoughts?

Ok, forget about going after a cash out for the purpose of rehabbing. In fact, I don’t think the building NEEDS to be rehabbed if I understood this deal from the beginning.


What about this senerio?

I approach the bank and say, Yeah, Mr. Banker. I have this nice commercial building sitting over here that I decided to lease out to bunch of tenants that what to set up antique booths in the building. Now that I have commitments signed off by some of these tenants ready to lease from me I want to refi the building by getting a better rate and term over what I currently have and also pull a little cash out of the deal. The building is in great shape and I’d be looking for a refi at 80% LTV based on what the appraisal comes in at. I’m going to be setting up a booth for my own account in the building also along with the other tenants. The cash I get out from the refi I’m going to use for a little working capital and cover doing a little of my own tenant improvements to get my own booth set up and going.

Forget about trying to after a refi for the purpose of getting a loan to rehab. If it doesn’t NEED a major rehab then why not just refi the thing the way it is and say the money from the cash out is going to be used for his business he will be setting up inside the building? That’s not the same as doing a rehab…it’s setting up a business and at best doing a little tenant improvement to set up the business!

Would that work on making it easier to get the refi done?

It’s the brain. It’s working on overload and thoughts just pop out of it every now and then. LOL