All Forum Posts by: Zach Whitt

That's an interesting idea, but I doubt we have business equity to support it. Book value is low with much of my equipment already having been depreciated. Cash flow should support the property loan.

To clarify: 25% down on the land + building costs would probably work, but 40% down on just the land purchase + spending 100% cash to renovate is not possible.

Hey all- I'm in the process of (hopefully) buying a small piece of land for my business. I've done some residential investing and remodeling, but never anything on the commercial side. My primary question is how to find and structure a loan.

My details:

- I own a small waste-hauling business

- Currently lease a shop to perform in-house truck repair and a yard to store dumpsters

- I've been searching for an industrial space to purchase for a couple years, and haven't found anything in my price range

Land Details:

- Just under 2 acres

- Cleared, fenced, and stabilized (asphalt millings)

- Had a house which was torn down that had electric, gas, and water, so I know it exists to the property, but I don't know the condition

- Plan to 1) store dumpsters on the property and 2) build a small metal building for our shop/office (3-5k sf)

What are my options? (here's where I need help)

- I'd like to minimize cash down, as it makes sense for me to invest cash into the business vs the property

- If not for minimizing cash, I would purchase the land with a loan and then use cash to renovate the property. My concern is that at 30-40% down I probably can't afford the cash outlay

- Would an SBA loan be appropriate in this case? I used one to purchase this business 3 years ago

- Any great lender recommendations who can help walk me through the construction loan/refinance process?

@Steve Vaughan Yikes! That's quite a warning.

@Benjamin Haberman What is this portion here? "Offer financial partner 6% amortized over a 30 yr period(on all money loaned for acquisition/rehab) with 25% equity? I put question mark because I am curious to know your thoughts on this."

Would this be guaranteed return and then the 25% equity additional on the top?

I agree with the general sentiments here: 1) some tenants won't pay to fix that little thing that will end up costing you way more than their security deposit (and thus causing a lot of headache for you to sort out) and 2) I think it gets really difficult to define what is their responsibility and what was deferred maintenance on your end. I don't want my tenants to be responsible for my fixes.

$10k for $950 a month! You were right in thinking that something has to be wrong...

I'll be watching this one. I'm really interested to hear the numbers. I have no idea where to start on a rehab estimate down to the studs like this

Make a detailed scope of work and go over it, then go over it again and again and again to make sure sure it's thorough and accurate

Incredibly helpful thread. I'm knee deep into my first rehab and I'm realizing every day that I wish my list was more comprehensive!

Georgina- I'm no expert and I'm sure not in San Jose. But to help out those that will be answer him I think most people will want to know- how many square feet, how will this compare to the comps, what is your $sf for your ARV and comps?