Posted by KJ on May 18, 2006 at 11:13:15:
I agree with Natalie’s take on this. You will also need to find out the percentage of investor owned units in the complex. Many lenders will redline the complex if it surpasses a certain percent of NOO units. Citibank, as an example, limits OO loans to less than 39% NOO units. Above that their undewriters will TD your buyers loan. Not all lenders use the same criteria, but you don’t want to be blindsided on this issue.
Additionally, I’ve found that when selling with 75% of the work done most of my potential buyers didn’t understand the potential the place will have when completed. So if your holding time is factoring in a buyer contracting at your 75% completion stage, you may want to rethink that position. HTH