Scenario Advice

[Chris Welch]

Hi BP team!

I'm a prospective borrower looking for money for a fix-and-hold project I'm working on. No one in my network who could lend me money is really experienced either so I want to offer them some terms that are reasonable as a starting point for our discussion. I'd like your advice on my thinking, and would also be interested in knowing more about other hard-money/private options available in my situation.

Here's the scenario:

Project: Upstate NY, 3-unit/12-br multi-family mansion - complete gut, rehab, and change of use from 2 to 3 family

Purchased: 115,000

ARV: 375,000-400,000

Held by my LLC, not personally

Project Status: Rehab is currently half complete. Property is currently partially rented and all three apartments have market-rate lease commitments from June 2014-May 2015. Property will be fully stabilized by Aug 2014, at which point I would like to have the option to pursue a conventional loan.

Finances: I'd like to secure a bridge loan to get me comfortably through the final push of the project. So far everything is self-financed (savings and credit) and no liens on the property. I will still have cash in savings or income to cover at least 75% of the total project, if not the whole thing.

Loan goal: I'd like to take out 150,000 in a bridge loan to pay back my credit cards and get me through the stabilization.

Proposed terms: 150,000 at 9% interest over 24 months. No payments until Sept 2014, and no prepayment penalty.

Again, I'm new and anxious for some mentoring here, so please feel free to pick apart this deal!

Thanks in advance for your help!

Chris