All Forum Posts by: Ken Jernigan

Works for me. Anyone else?

Looks like a couple of folks on this thread have FT jobs. Maybe something on a Sat or Sun? Start out at a Port City Java convenient to all and see where it goes from there? Or maybe a brewery?

In Wilmington as well, working with investor group that looks at SFRs, multis, self storage and MHPs. Would be happy to organize a meetup or something like that to share ideas, opportunities.

You'll need a complete lender package: Tax returns on property, personal tax returns, property appraisal, maybe an environmental, rent roll, personal financial statement, schedule of real estate owned, decent FICO. Probably get a 7-10 year loan with 25 year am at around 6%. Maybe better terms if deal is really strong. I've financed a lot of commercial properties over the years, you can PM me if you need more detail.

There are plenty of lenders who do this at around 70% LTV if your personal credit is reasonable. A few are online, but you can also search company directories, like Scotsman Guide.

Most of your questions regarding the pro forma should be answered in the feasibility. All the same something's not right about this deal. $40 million in debt implies a $50 million or so project. Round about 250 rooms at a top tier luxury hotel. A legit project like this would have pretty heavy hitting sponsors and be on the radar of big time institutional lenders.

@Craig Garrow @Victor Poprotsky SBA 90% loans--the 504 program-- are for fixed assets only. Practically this means owner-occupied commercial real estate. With this program, no financing for any working capital or goodwill. They have significant documentary requirements for the source of the 10%. Any money from the seller must defer repayment of principal and interest until the SBA loan is completely repaid--normally 25 years. Also, business acquisitions are considered start-ups and an additional 5% equity is required, meaning in this case the maximum advance will be 85%.

First thing you need to do is clarify the environmental situation. Lenders will not lend if there is an issue on any part of the property. That's because they can be dragged into liability for damage due to any contamination. Your state environmental agency can issue a no further action letter when the property's clean. That's the lender's green light to proceed. You may be eligible for a Brownfields agreement, but my experience is these arrangements take a long time for the remediation plan to be approved, and longer for the clean up. You might check with your local municipality to see if they have any block grant money for remediation. Also did you have an environmental indemnity in the lease with the trucking company? You might find a lender once you've been accepted to the program. It's essential to have a good environmental consultant to guide you.

I haven't been involved in cannabis yet, but I have talked to lenders who will fund these businesses. This is private money, not cheap. Also few banks will allow deposit accounts or merchant processing for cannabis. This means they are cash businesses, subject to all risks associated with a lot of money on site. Cannabis is a rapidly consolidating sector, so this start up will confront business risks as any other in a fast growing industry. 

As far as who pays for the new building, it's a point of negotiation. I've seen it both ways. Since you are eligible for cannabis, it might be worth  while to approach others in the industry with a development plan. You could get a better deal than the one on the table.

I work with an investment group that specializes in turning around troubled properties. You can PM me if you'd like to discuss further. Good luck!

Are you a broker, or a direct lender?

That's a pretty small loan for most lenders to fool with. You might try your local banker or credit union if you have a relationship. It would be a straight up personal loan. Or a HELOC if you you have equity in your primary. Either will need decent personal credit.