Financing renovations for a condemned 6 unit property

[Olga Yazovskaya]

Looking for creative ideas and advice.  We recently bought on an auction a condemned 6-unit property (7200 sql) in Slavic village. It is a clean slate walls-and-studs-only building. The plan is to renovate it and create affordable housing, possibly section 8 only.

Having no experience in commercial properties and financing project like this, I decided to reach out to this community hoping to get some guidance for the following. 

- Best options to finance renovations for the property.  Given that purchase price is low it is hard to use the property as collateral. Purchase price is below $30K, renovations cost based on one contractor bid is $350-500K.

- Best way to estimate the ARV. Finding comps have been challenging and turned out to be very different from SFHs. Properties listed on Loopnet often differ in condition, location, type of building, hence huge difference in price.

- Any other tips specific to the nature of the property or location. 

Thank you in advance.

[Vadim F.]

@Olga Yazovskaya I think you got in over your head from what I am reading. You also have to take into consideration this is a condemned building, so you will need to get permits for all the work you will getting done on the property, Also, given that this is SV and not a prime area on the west side your ARV will not be high. Based off what I know from that area is you will be lucky to get it to appraise at 300k and you will be upside down. Unless you have 300k cash on hand to handle the rehab, getting a HML or PML to do the work will be impossible since its ARV will be less then what is needed is needed to get it rehabbed. My personal advice is cut your losses and move on.