Re: Need a Hard Money Lender for this deal

[Mohammad Ali]

Hi
I wanted to find out if this deal is even possible to work or should I just give up on it..sorry it is going to be a long post, by the way I am new at this so any help would be greatly appreciated.

I have an opportunity to purchase a property in Chicago, IL, it is a 148unit property that requires a complete gut rehab. I can purchase the property for 3.8million. The appraised as-is value is 5million. The estimate provided by the construction firm for the rehab will be approx 3.7million. The estimate that I have is a complete itemized breakup of labor and material costs and includes everything from roofing, windows, furnace, kitchens, bathrooms, everything. Completely broken down. The gross rent roll after repairs lease up will be approx. 1.5million/yr and the after repair value of this property will be 12-14million based upon comps or 12-15million based upon rent roll multiplier x8-10.

I already have a construction firm that can do this project, I also have a property management company that I will hire for the lease up.

My exit strategy is to refinance the hard money loan within 1 year and then I would decide to either sell the property or to continue renting.

Now my question is that can I get a hard money loan to do this project. This will be my first rehab project. Also my credit score is quite low around 500. But my fiance's is around 600. A little information about me is that I am a 4th yr med student, I paid my whole tuition on my own without any loans that is why there are so many discrepencies in my credit history and thus the low score. I believe that management skills are more important that actual experience, since I do not plan on doing the actual work myself or finding subcontractors etc. I have a general contracting firm that has been in the business for over 20 years that I plan on giving the project to they came up with the itemized construction cost thus there should not be any issues in construction. With all this taken into account do you think any hard money lender would finance me? the LTV based on ARV would be 66% on the low end (12million) and 57% ( 14million). I am taking into account the loan being 8million 7.5million for purchase and rehab and the other 500K for interest and closing costs that would need to be rolled in. If anyone can help me with this I would be willing to pay them a fee when I refinance the hard money loan.

Mohammad