Posted by BillW. on December 11, 2000 at 10:01:17:
Rich,
Here’s an idea. Why not get your potential tenants together, explain what needs to be done and see if they’ll foot the bill. With their combined cash/credit maybe you can get the money for the improvements. You could offer them a return on their investment, as well as preferential location in the building, lower space rent, etc. as an incentive. Plus, with some of their own money in the project, they will be more inclined to stay.
BillW.
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
Posted by R.Barr on December 21, 2000 at 14:11:09:
Rich, I may be able to help. I’m a Hard Money Consultant and I have access to private investors that loan on deals like this. They base their loans on equity only, regardless of credit. If you are interested please send a blank email to: borrow@getresponse.com for info.