Full-gut 6-unit building - How should I finance it...
This would be a new kind of buy for me, which gets me real pumped up. (It's actually a property that I've eyed for a couple years, just daydreaming, & reached out to the owner llc during that time but never heard back).
tl;dr My idea so far to purchase would be a short term 12-16 month hard money loan, 80% purchase w/ 100% renovation, with private money coming in to fund the 20% & points, refi'ing into a conventional note with my local lender who I have a decent relationship with when the first note balloons.
Since I'm a little new to the commercial arena, I'm curious if there's some other ways to do this outside of the very obvious, vanilla way I stated above. Any other creative ideas? (Seller needs the equity out asap, so seller-financing is out)
As for the deal itself:
Located a few towns over from me (but not far enough where management would be a hassle), right near the better part of the borough, near the middle school, very close to stores & very close to where new construction is being planned & the area is on an upswing.
- 2 - 2 bedrooms (1150-1200/each)
- 4 - 1 bedrooms (850-900/each)
- Going inside it this week, but from my walks around the outside, I'm ballparking about 100k in reno
- Seller asking for 200k
- Taxes as-is about 6500
- Seller states all zoning approvals & site-planning have been completed, only thing left to do is pull permits and put nails to wood
As of right now, my immediate plan would be to sit down w/ the commercial people at my lender's, assess my standing, and start all the other due diligence common with a typical, residential purchase. Are there other items I should be thinking about that aren't common in residential but are a factor for this deal?