Need Rehab funding for 8-10 unit apartment..

[Chris Ward]

Greetings BP people. I have a possible deal on a 8 unit apartment building, could make into a 10 unit easily. The project will require full interior completion and some exterior work as well. Basically it's just a shell and needs finishing. I have run the numbers and the property will cash flow very well after rehab using conservative numbers. I'm acquiring bids from several local GC's and should have those within a week or so. My past experience as a GC gives me some idea of the cost but I want some local eyes on it. Property is located in Florida near major city. I am able to purchase the property but I will need to a partner or investor to cover the rehab portion. This will be my first large apartment deal so any advice or suggestions are appreciated. I'm ready to move on this deal but I need some help. I'll do the leg work and oversee the project from start to finish. Upon completion the property will be professionally managed. Let's do this. Thanks, Chris

[Anthony Dooley]

I would lease it, with an option to purchase based on 70% of the ARV. This way, if the project never gets completed, you don't own it and you can walk away. In that condition, it probably is not financeable. The lease allows you to use your money for repairs, get renters in there, and increase the value. Then you can get a traditional commercial loan for it. In the meantime, you control the property and nobody else can buy it. You could also fix it and then sell it for more than your contracted price without ever owning it.