Posted by ddt on August 22, 2005 at 09:18:44:
just outside of Chicago, IL
Joint Venture or Hard Money - Posted by ddt
Posted by ddt on August 19, 2005 at 20:54:24:
Investor Purchased 2 Lots. Zoned Residential. Market value 23K apiece. Owned free and clear w/ no liens.
Wants to improve as follows:
- clear land (currently wooded)
- apply for variance to combine lots
- construct townhome consisting of 5-7 units
(estimated ARV between $1M - 1.5M) - will need to develop access to lot
(approximately 350 feet of road)
Lots owned free and clear. Financing to include:
- permits
- rezoning/variance fees
- blueprints
- 350 ft road development
- construction costs
Ongoing conversations with city planners/engineers and don’t anticipate any difficulties with any approvals
or permits.
Recent bankruptcy, so investor will need to go the hard money or joint venture route. Given the general layout of this deal, which would be the better more realistic route?
Re: Joint Venture or Hard Money - Posted by John B. Corey Jr.
Posted by John B. Corey Jr. on August 22, 2005 at 18:22:29:
Hard money is generally designed for situations where the loan is something like 65% to 70% LTV.
Rarely is hard money designed for construction financing. When it is that is normally for a large deal where the ‘lender’ is going to get a stake in the deal.
Bringing in a JV partner who has the credit might make this something that will work with a local construction lender.
You will have to look at the numbers to see what is the most cost effective and the least hassle. My bias would be to pay a slight bit more for a solution that is a lot less hassle.
John Corey
Chelsea Private Equity LLC
Re: Joint Venture or Hard Money - Posted by Opportunist
Posted by Opportunist on August 20, 2005 at 23:04:10:
I’d like to know more concerning this deal. May be interested in a Joint Venture. What part of the counrty is this to take place?