All Forum Posts by: Richard Copeland

Net worth equal to the loan amount is not a standard requirement regardless of the loan size.  This is only an issue depending on the lender.  For example, if you are doing an agency deal then net worth equal to loan amount or greater is a requirement.  If you are doing a conduit deal, then it isn't a requirement.  As far as local banks, it depends on the bank.  Get with a good commercial broker and they can guide you through the process.  A good broker is worth their fee.  

Tina,

No, that's not the case.  I good credit score is good, but the lender is going to want to see, post close liquidity, experience, and equity down payment.  Experience can be over come with liquidity and 3rd party management or bring in an experienced operator as a member.  Most recourse lenders will lend even if you don't have experience, but you have the cash, credit, and job history.  We arrange financing for first timers as well as seasoned investors/owners, so everything is possible.  Hard money may lend without you putting money in the transaction, if the numbers make sense.

Freddie Mac and Fannie Mae are the way to go, if you me their requirements.  If not, there are other alternatives in addition to them.  If you want, send me a PM to discuss further.

Bharath:  I know a couple of good insurance brokers.  Send me a PM.

Per your friend, the site is approved for 22 units.  I would confirm with the City.  I would get with an experienced architect and get their opinion on how many units can be built on the site and ask them how long to begin construction.  Also, reach out to a MF contractor and ask what the cost would be for the number of units your are building.  This will give you a ballpark of cost.  Keep in mind there are a lot more cost involved in the process.  With the ball park, you can check out comps in the area and see what they are renting for and estimate your rent.  With your rent, you can estimate your operating income and expenses to determine the properties value.  Contact an area broker or look at Loopnet to see what cap rates are to assist in your valuation.  If your value is the same or close to the same as cost to build, it's not worth pursing unless you want the experience and have cash for unexpected expense.  However, if there is enough equity between cost to build and valuation, then go for it.  Have your architect create a financing package with drawings and everything to present to a builder for a quote.  Once you have the financing package, you can approach lenders for financing of the transaction.  Typically, lenders will probably as for you to have 35% in the game, but not always.

Jason:  The net worth requirements is true for some lenders.  There are other lenders that offer similar financing, but don't have the net worth requirement.  However, liquidity and experience issues can be overcome relatively easy.  For post liquidity some lenders want 10% of the loan amount; however, there are lenders that would only require a least 12 months of DS to suffice.  In regards to experience, if you don't have it nor does your partner, then you can compensate by hiring an experienced third party management company.  Get with a good broker and they can walk you through this process.  If you don't know of any, my firm would be glad to assist.  Send me a PM to discuss.

Hayden:  I own a commercial brokerage firm that arranges debt and equity for assets across the country.  Can you send me a financing package and let me take a look?  Oh yes, we can secure financing for Rite Aide as well.  How would you feel about a 10 year term/30 year am?

For Orlando, I would just Google hard money lenders in Orlando.  I am sure there are a good number in your market.

Nick:  Since the Commercial Meet-up is at the Texan Grille there is a set fee for lunch. 

Lifestyles is a paid thing, but they have a free case study (meeting) once a month, which is open to the public.  It's a good opportunity to meet others in the business.   There is a selling component at the end of the night in the main conference room, but you don't have to pay or attend that portion of the function. 

Andy Davies has a meet-up group at the Texan Grille at Town & Country that meets once a month. The next meeting is this Thursday at 11.00 am, https://www.meetup.com/Commercial-REI-Meetup/.