Posted by Rich on December 20, 1999 at 07:33:06:
I have been trying to come up with a way to finance the renovations of the commercial property I recently purchased. As I stated in previous notes, we just finished renovations of an historic home and are looking to sell it to obtain some capital. If you’d like to see the home, go to my web site.
I have about $60k in equity in the renovated property, as well as $50k in the commercial property (according to the as-is appraisal which was done when I purchased the property in July).
Does anyone think that an investor would be willing to loan $40k for 3 years yielding 15% interest only over those 3 years with a balloon of $40k at the end, using the collateral of two 2nd mortgages on these properties? If I don’t sell the property in 3 years, I can always rent it and refinance the 1st to pay off the $40k.
I have people interested in renting it now (college students - who pay well, but can sometimes be destructive), but I’ve been holding off to see if I can cash out.
Does my deal sound fair?
Am I giving too much? Too little?
I’d like to hear some opinions and alternatives.
Thanks in advance.
- Rich (in MD)