$2.2M Condo Conversion of School in SW Michigan - 90 Min from Chicago

[Marshall Downs]

Hello All,

I'm looking for investment partners for a distressed condo conversion project. Subject property was formerly a public school that was purchased by a developer in 05/06. Construction began but only completed 2 of 22 units. One unit is sold, other completed unit included in purchase. 3 more units framed, rough MEP's. New windows throughout building. Have local bank interest to lend with viable investment partners. Have existing Condo Docs, Expired but renewable PUD, Prints for building and 5 units. My figures are as follows:

Square Footage: 35,000
Units: 20
Acquisition: $350K
Soft Costs: $152K
Hard Costs: $1,546,750 (includes 12.5% contingency)
Holding Costs: $153,250
Project Total: $2,202,000
Unit Sale Price: $152,500 x 20 = $3,050,000 (conservative)

I have this structured to raise acquisition cost ($350K) and bank will invest $750K for rehab. Sales will fund remaining rehab. 2 year project with strong ROI on backside.

I have construction and project management experience and have completed similar projects. Good relationships with local govermental authorities as well.

Thanks for checking out the post and I look forward to hearing from the BP community!

[Marshall Downs]

@Craig Rismiller

@Craig Rismiller in the hopes that they would be interested in lending on the end. They let me know that it would be more challenging to sell these loans until we reach 60% capacity, but that they would be interested in offering a portfolio product to qualified buyers to mitigate that concern. Of course, they don't want to be the only institution in the mix, but it helps.

As far as rental goes, the numbers are just better than break even. I ran this project both ways to confirm it would cash flow and it does, but it definitely isn't a straight rental project. Some blend of sales and rental would work for awhile.