Need Advice On Private Money

[Jerry Jenkins]

I have been investing in real estate for 30 years, am a licensed Realtor, and have a 800+ credit score but have never done a Private Money loan so wanting to know what is normal for rates and terms. Situation is that I have a 99 year land lease titled 4plex that I purchased in 2009 for all cash at $180K and have put another $20K in for remodeling and maintenance.  I bought with the intent of converting title to 4 separate condos since over 50% of the community has converted 4plexs to individual units and that would raise the market value of the units.  Currently my 4plex as a 99 year land lease started in 1977 should be worth around $250K but the individual units are reselling for $75K making mine worth $300K.

My goal is to sell, place the cash in a 1031 Exchange account and then buy 3 to 4 condos in a high rise using private money loans with 30% down payment on a 30 year fixed amortization but a 5 to 7 year balloon.  This would give me better monthly cashflow and higher appreciation.

My first worry is that the 1031 Exchange has a time limit to repurchase like kind investment property and I do not want to be forced to buy 4 condos in that limited time. Also what would a note for this investment look like as far as interest rate and points?  I am only looking at private money because banks are not lending on condos in my market.

The other note question I have is would be possible to get a note on the land lease 4plex now while I am negotiating with the HOA board and the county to get the retitleing done so I can pull some; maybe 50% LTV of the equity out and start buying a condo or 2 so I have less equity to reinvest during the limited 1031 exchange period? If so what would the terms and rates be for this note?

I have called several local banks and credit unions and have a meeting setup for Monday where they re willing to loan at 80% LTV on a. condo but are wanting 7.99% interest and 3 points for a 30 year fixed rate and a 5 year balloon. Will be asking about loans on land lease at the meeting but am wanting some comparison numbers before sitting down with them.