I own the building…now I need to complete it. - Posted by Rich
Posted by Rich on December 11, 2000 at 09:07:13:
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.