Sweeeet Deal - Or Is It - Need Advise
Found a Multi family REO. Here are the numbers:
Asking: 1,800,000 - 2,000,000
Units: 125
Occupancy: 35%
Condition: In need of 100% renovations of which about 20% complete.
ARV: 3,300,000 based on 2001 comps.
Here is the deal, original owner died and wife attempted to continue manage property. Built in 1975, in was in need of repairs and when wife did not know where to start, occupancy went from 100% to about 10% so of course the bank came a' callin'. Well the Bank's point man has launched a new 800K rehab project to bring the property up to snuff and will sell after completion for 3,000,000 but broker has indicated that he doesn't have time to devote to completing the project and in becoming increasingly frustrated with the project.
I have been told that piggy back or combo bridge / construction loans are the way to go, but I don't really have alot of cash and credit in not in line with bank financing.
Need to know what you heavy hitters think about a way to approach this deal.
John
I'd submit an offer to the bank that owns it that you'll buy it if they finance it how you'll need it. They may not go for it, but if they will it could be a cinch.
If you could get it for 70% of the 3.3 including fix up you can get hard money lenders . (HDL) Some HDL's do not care what your money position i the deal as long as you have something to risk and experience in doing deals. Just quoted 12 % rate with 6 points and 1500 in other fees plus title policy but still better than a partner most of the time. I like the idea above better about the bank selling and financing and providing the rehab. I would for sure try that approach first and then wse HML or a strong partner. Sounds like a good deal. I am trying to put one together here in Austin that we might condo even thiught it is in sub area. Maye investors will like the fiancing all cash flow,
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr