7-Unit Apartment Building need FUNDING- ARV $750K

Des Moines, Iowa
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7-Unit Apartment Building need FUNDING- ARV $750K

Corey Hoeft
Member since 2021 · 5 posts · 2 votes

Property has an as is value of $400k-$450k

Currently is 100% rented and occupied.

Current rental rates are $4,515, but 15%-20% under market, $7400 once rehab is completed.

ARV is $750K.

It needs $150k-$200K of rehab.

Looking for a 8-12 month loan for $550k-$600k (purchase price and rehab) that would be in 1st position at an interest rate of around 9%

Will do a traditional refinance with a bank once rehab is complete and rental rates are raised and in place.

Property is in Ames, IA within walking distance of Iowa State University.

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  • Bobby FeinmanBusiness Member
    Lender · VA Beach, VA · Member since 2019 · 914 posts · 91 votes
    1y

    @Corey Hoeft

    Hey Corey. We would love to assist you with this. I will dm you

    Bobby

    [email protected]757-222-5937
    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y

    $600k loan is already 80% of the ARV, which is not typical for 5+ Units. Additionally, it is very difficult to source a lender that will lend at a 9% interest rate when most private lenders are at 10.5-12% for this kind of transaction.

    Good Luck! 

    I can realistically see this at 65-70% the initial Purchase Price and maybe some of the renovations financed at a limit to 65-70% of the ARV.

    [email protected]818-269-7983
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  • Corey Hoeft
    OP
    Member since 2021 · 5 posts · 2 votes
    1y

    @Erik

    Thank you for your response. I appreciate your insights, and I agree with the points you've made. That's why I specifically used the term "around 9%"—to allow flexibility in negotiations based on the lender's comfort level. I have previously secured financing for 75% ARV, including rehabilitation costs, on another property, and I am aiming to replicate that success here. While I am not a lender or an expert, I value your perspective and recognize that your opinion is likely more accurate than my own experience.

    @Erik Estradaundefined

    0Reply
  • Garret A.Business Member
    Lender · Member since 2024 · 12 posts · 1 vote
    1y

    Erik^^ hit the hammer on the nail for this one. 

    ACQ, it's potentially possible to find a little higher leverage for this type of deal. Needle in a haystack however. Reason being is no one in secondary is picking up paper or trading for 70-75%+ as is on MF 5+. 

    Caution recommended entering with higher leverage just because it saves money today. You will most likely end up in a cash injection situation on exit to term debt.

    Best

    [email protected]714-225-8858
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