4-Unit Residential Construction in NJ: Need POF Along w/ CLA Can You Do This??

Very tricky deal here...

I have a land deal in Jersey with a situation as follows:

• Loan request now as a bridge would be for about $600,000 (ideally add that to $1.2 MM construction loan or at least $1.6 MM loan request)
• $350K worth of liens on the property have to be paid
• property is in court right now for tax lien foreclosure
• Court has no problem giving the property back, provided there is a good reason.
• & of course, the tax liens portion ($85K) has to be paid back.
• Borrower needs $1.2 MM to build 4-unit residential
• Needs $200K to fix well water issue, upon which it's too easy to get OK to build.
• Each lot is worth $300-350K, making the property worth a conservative $1.2 MM now.
• ARV is $2.4 MM (that's 4 residential units going @ $600K min.)
• They already have prelim plans; full plans can be obtained upon request.

Basically, what it takes here to get this deal going is a conditional approval from any hard-money lender. The thing is, the bank will ask to see PROOF OF FUNDS upon receipt of the CLA. Can anyone get this done?

Please PM me ASAP, as the borrower goes back to court on Thursday. Feel free to reply on here if you feel this is more a "pipe dream" type of deal. It doesn't seem impossible at all because the residential zoning is pretty much there, & lenders love doing residential construction. The tricky part is the money that needs to be spent on the bridge end.

Jerry does multiunit. Not sure about construction. Try Meredith Weiss in NY. 888-373-4752. She does ground up. Its close enough too. Tell her Steve Ruiz from Presto Prestamo shot her contact.

Only the best.

SR

Any construction you are going to need entitlements. $600,000 over $1.2M is 50% LTV for land loan. Take out $350k liens plus $85K taxes plus $200K well plus fees that's over 50% LTV...Too much hair on this deal.

$600K, if the letter were given with proof of funds, would most likely suffice for the court.

[QUOTE=Steven_O;167705]Jerry does multiunit. Not sure about construction. Try Meredith Weiss in NY. 888-373-4752. She does ground up. Its close enough too. Tell her Steve Ruiz from Presto Prestamo shot her contact.

Thank you. I'll check em out.

A lender isn't going to give anyone "proof of funds"....because a LOI isn't an approval. An approval has to go through underwriting. And appraisals are taking 6 weeks right now. And I have seen land approvals at + or - 50%. Had one at $160K and another appraisal at $610K Same property.

Appraisals are NOT taking 6 weeks. In the past 3 months I've done 4 SFH/2-units, and between scheduling with the tenants that took the most time, it took about a week or so to get in, and the appraiser took not more than 7 days to get back the appraisal report. 3 weeks process start to finish. Then we took another 2.5 weeks to close, but that wasn't my fault, it could have closed easily within 10 days had I prepared for the appraisal to come in at $125,000 (when in January when we tried TWICE it came in at $71,000).

Micah: Well good for you but I have 5 out and they are taking 4 - 6 weeks - maybe because it's Florida - Land and Hawaii - Mixed Use and DE - strip mall, and commercial 6 weeks.

Try Finance of America or ABL1

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Originally Posted by Olderguy

A lender isn't going to give anyone "proof of funds"....because a LOI isn't an approval. An approval has to go through underwriting. And appraisals are taking 6 weeks right now. And I have seen land approvals at + or - 50%. Had one at $160K and another appraisal at $610K Same property.

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Two appraisals coming in at such insane difference just means one appraiser was working for the lender & the other was independent, if you ask me.

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Originally Posted by brandon_

Try Finance of America or ABL1

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Thanks. I'll check em out.

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Originally Posted by Fundyman

Two appraisals coming in at such insane difference just means one appraiser was working for the lender & the other was independent, if you ask me.

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Could be, but it was ordered via a third party both of the first two times by different lenders, and the third time, I was more in control with a new lender, and I did the processing to order the appraisal. The first two times it was in January, when prices were really confused. In June, things have since stabilized on the upper side.

No - different appraisers and both ordered by borrower.

No problem - if you need an introduction let me know.

Most just use an appraisal management company nowadays, and most of the time you get a **** appraiser who is new to the game and just bids the lowest so the company goes with them. Its tough to find good appraisers on your deals nowadays. Recently they've been relatively quick to get back at least in the SWFL area, but like I said most of them suck. Turnaround is usually a week for them to come out, and they have the report early following week. This is just me speaking on my own personal purchases in FL. Can't vouch for other areas. Last year it was rough trying to get an appraiser. Agreeing with you on the weeks part.