Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Commercial Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 4 years ago,

User Stats

82
Posts
61
Votes
AP Horvath
  • Developer
  • Austin, TX
61
Votes |
82
Posts

How to maximize appraisal post-entitlement, pre-financing?

AP Horvath
  • Developer
  • Austin, TX
Posted

I have a 1-acre lot in Central Texas that I have rezoned for commercial and plan to build 13k SF of office-warehouse product, in 2k SF unit increments. 

I paid cash for the lot, and am currently working through the entitlement process (which I am also paying cash out of pocket) -- I estimate that  once I am fully entitled and fully permitted to build, I will be $400k cash into the deal.

I estimate site prep/grading/construction etc etc will be around $1.2m. The local bank likes the project/product and would like to finance it. They have suggested that I contribute my equity as the down payment for the construction loan.

So, if we were to take $400k cash in against $1.2m, my loan would be $800k and LTV would be 67%.

So let's fast forward a few months --- I am $400k in and have a fully permitted shovel-ready project --- presumably, the bank would have me pay for an appraisal to determine the value of my project at that point.

Stating the obvious, the higher it appraises, especially above and beyond my cash-outlay, the better for me. 

For example, $500k against $1.2m, my loan would be $700k and LTV would be 58%. If that were the case, I could either take a bit of cash out or simply have a lower debt payment. 

Any suggestions on what I can do in the project to make it appraise better/higher post-entitlement pre-financing?