[RichDennisPoorDad]

No full fix and flip experience.

Experienced GC doing full teardowns and rebuilds, wants to do something just like what hes doing for his clients, but for himself. (New york city)
Ex: Buy an old lot 2 family, re-zone it for a 4 story building. Sell units after.

Has home equity, could do creative financing and put some money together.

Anyone ever digged into this, or done something like this that can help?

[Olderguy]

Hard to do financing if it needs re zoning to work.

[dpFund]

He would do best to start with something easier that does not required rezoning. Perhaps buy a simple SFR, rehab and either rent or sell. Get a couple of these under his belt and he will be better positioned for the more complicated stuff.

Dan Page

Boulder Equity Partners LLC
Direct: (303) 938-8280
www.BoulderEquityPartners.com
dan@BoulderEquityPartners.com
BoulderEquityPartners@gmail.com

[RichDennisPoorDad]

He would do best to start with something easier that does not required rezoning. Perhaps buy a simple SFR, rehab and either rent or sell. Get a couple of these under his belt and he will be better positioned for the more complicated stuff.

Dan Page

Boulder Equity Partners LLC
Direct: (303) 938-8280
www.BoulderEquityPartners.com
dan@BoulderEquityPartners.com
BoulderEquityPartners@gmail.com

Appreciate the feedback. What if the contractor opened a fund and raised the acquisition and re-zoning costs.
Once land is acquired, re-zoning is approved- would said contractor be able to obtain a hard money construction loan?

Now it's no longer a re-zoning issue, since the plans are approved and the city approved the re-zoning.

Keeping in mind also, that the contractor is very experienced in building many residential homes from the ground up, and experienced in doing the EXACT SAME development he's doing now, twice, as the contractor for another developer. (Naturally, the developer has no interest in helping the contractor with this)

[RichDennisPoorDad]

Hard to do financing if it needs re zoning to work.

Steve I appreciate you bringing this to light, I've replied above to Dan about a possible creative alternative, any feedback?

Many thanks in advance!

[dpFund]

Appreciate the feedback. What if the contractor opened a fund and raised the acquisition and re-zoning costs.
Once land is acquired, re-zoning is approved- would said contractor be able to obtain a hard money construction loan?

Now it's no longer a re-zoning issue, since the plans are approved and the city approved the re-zoning.

Keeping in mind also, that the contractor is very experienced in building many residential homes from the ground up, and experienced in doing the EXACT SAME development he's doing now, twice, as the contractor for another developer. (Naturally, the developer has no interest in helping the contractor with this)

I respect your creativity. Makes you a good broker, solving problems for people.

The unfortunate reality is that as a lender, we get bombarded with construction requests every day. The construction money is naturally going to gravitate toward the sure bets, where somebody has the requisite experience, no messy stuff requiring rezoning, etc. This is further complicated by it being in NY, with bad foreclosure laws for lenders. It's unfortunate for folks like your client but it is reality. To best help your client - think like a lender and recognize this is going to be an issue, then solve the problem.

Suggestion:

You say he has equity in his home. Use that equity to purchase the property as a rental. What I would suggest is to buy the 2 family home then rent it out for awhile so he is cash flow positive. While he is renting it, take the time to get it rezoned and button up everything that he needs (permits, entitlements, etc.) to build the 4 family. Then, when he is ready to tear it down and build the 4 family, he has reduced lender risk with a higher likelihood of getting funding.

Dan Page

Boulder Equity Partners LLC
Direct: (303) 938-8280
www.BoulderEquityPartners.com
dan@BoulderEquityPartners.com
BoulderEquityPartners@gmail.com

[Olderguy]

Steve I appreciate you bringing this to light, I've replied above to Dan about a possible creative alternative, any feedback?

Many thanks in advance!

Start with one at a time..SFR to SFR.(single family residence)..There are lenders who will finance a fix and flip with no previous NOO or fix and flip experience.

NoDoc would be 75% LTV 100% rehab budget. You want hard money with no prepay or maybe 3-6 months interest guarantee or built into the loan. That's what is most likely. And it would be Interest Only payment 2 year bridge,

650 or better Fico.

620 - 649 Fico would be 60% - 65% LTV.

Below 620 would be 50% LTV with no min Fico program

[RichDennisPoorDad]

I respect your creativity. Makes you a good broker, solving problems for people.

The unfortunate reality is that as a lender, we get bombarded with construction requests every day. The construction money is naturally going to gravitate toward the sure bets, where somebody has the requisite experience, no messy stuff requiring rezoning, etc. This is further complicated by it being in NY, with bad foreclosure laws for lenders. It's unfortunate for folks like your client but it is reality. To best help your client - think like a lender and recognize this is going to be an issue, then solve the problem.

Suggestion:

You say he has equity in his home. Use that equity to purchase the property as a rental. What I would suggest is to buy the 2 family home then rent it out for awhile so he is cash flow positive. While he is renting it, take the time to get it rezoned and button up everything that he needs (permits, entitlements, etc.) to build the 4 family. Then, when he is ready to tear it down and build the 4 family, he has reduced lender risk with a higher likelihood of getting funding.

Dan Page

Boulder Equity Partners LLC
Direct: (303) 938-8280
www.BoulderEquityPartners.com
dan@BoulderEquityPartners.com
BoulderEquityPartners@gmail.com

I appreciate your input, I was able to talk my client down from doing a development with re-zoning to doing a fix n flip. He is highly experienced in doing this type of work for his clients which are also other developers as well as clients who buy old homes, tear them down and build their dream home. He's a licensed GC and does this type of stuff all day long.

We're now at the stage where this GC would do a fix n flip in the area that he works for his clients, and buy a super old 3 family house and do an A1 alteration and turn it into luxury apartments which are super hot in the neighborhood, plus there are tons of other people doing the same type of thing and making a killing. The client is 100% sure that he can do the work, as he does it all the time for his clients, however he's clueless on how to get the money for acquisition + rehab.

Since this doesn't require re-zoning, and he's highly skilled in the work that needs to be done, would a lender take a chance? Maybe even at 50% LTV with him coming out of pocket?

Thanks!

[RichDennisPoorDad]

Start with one at a time..SFR to SFR.(single family residence)..There are lenders who will finance a fix and flip with no previous NOO or fix and flip experience.

NoDoc would be 75% LTV 100% rehab budget. You want hard money with no prepay or maybe 3-6 months interest guarantee or built into the loan. That's what is most likely. And it would be Interest Only payment 2 year bridge,

650 or better Fico.

620 - 649 Fico would be 60% - 65% LTV.

Below 620 would be 50% LTV with no min Fico program

Steve I was able to talk my client off the ledge about doing a development and showed him another way to plant his own flag in the neighborhood that doesn't require re-zoning. Please check above, this would essentially be a fix n flip. No experience in borrowing money for construction, however his work speaks for himself. Just needs to figure out the financing. We ran the numbers, and with his skin in the game, we could be at 50% of the ARV.

Do you think there's a lender, or a high-risk lender, that would take a shot at this?

[Johndough24]

Steve I was able to talk my client off the ledge about doing a development and showed him another way to plant his own flag in the neighborhood that doesn't require re-zoning. Please check above, this would essentially be a fix n flip. No experience in borrowing money for construction, however his work speaks for himself. Just needs to figure out the financing. We ran the numbers, and with his skin in the game, we could be at 50% of the ARV.

Do you think there's a lender, or a high-risk lender, that would take a shot at this?

Triumph capital
High risk: gravity capital (david knudson) out of UT

Scotsman guide should help you find a home for it and earn full commissions.

[Olderguy]

Reach out...I have access to several different sources for these types of deals. Just have to look at the specifics on this one to see if we can get some traction.

Basic intake:

https://drive.google.com/file/d/1OD8...ew?usp=sharing

Typically 75% LTV 100% LTC 100% rehab .

Complete the intake and write up an executive summary in the detail section. Outline the GC experience.

Also if build to rent or build to sell.

[abfunders]

Speak with Ezi Spinner at Finance of America
ezi.spinner@financeofamerica.com

Please tell him that I sent you, they have a broker referral program and if you are able to close a loan with them, I get paid (without affecting your points).

[RichDennisPoorDad]

Triumph capital
High risk: gravity capital (david knudson) out of UT

Scotsman guide should help you find a home for it and earn full commissions.

Thank you!!!!

[RichDennisPoorDad]

Reach out...I have access to several different sources for these types of deals. Just have to look at the specifics on this one to see if we can get some traction.

Basic intake:

https://drive.google.com/file/d/1OD8...usp=drive_link

Typically 75% LTV 100% LTC 100% rehab .

Complete the intake and write up an executive summary in the detail section. Outline the GC experience.

Also if build to rent or build to sell.

Build to sell, I tried link but it doesn't work. Could you please advise?

[RichDennisPoorDad]

Speak with Ezi Spinner at Finance of America
ezi.spinner@financeofamerica.com

Please tell him that I sent you, they have a broker referral program and if you are able to close a loan with them, I get paid (without affecting your points).

Will do, thank you!

[Olderguy]

I just changed the link and it should work now.

It's not about commission - it's about structuring the deal so it can be funded.

Do your due diligence and then reach out to me.

[dpFund]

I appreciate your input, I was able to talk my client down from doing a development with re-zoning to doing a fix n flip. He is highly experienced in doing this type of work for his clients which are also other developers as well as clients who buy old homes, tear them down and build their dream home. He's a licensed GC and does this type of stuff all day long.

We're now at the stage where this GC would do a fix n flip in the area that he works for his clients, and buy a super old 3 family house and do an A1 alteration and turn it into luxury apartments which are super hot in the neighborhood, plus there are tons of other people doing the same type of thing and making a killing. The client is 100% sure that he can do the work, as he does it all the time for his clients, however he's clueless on how to get the money for acquisition + rehab.

Since this doesn't require re-zoning, and he's highly skilled in the work that needs to be done, would a lender take a chance? Maybe even at 50% LTV with him coming out of pocket?

Thanks!

However you want to do this is fine. Looks like there are several folks jumping in.

If you want me to fund, reach out by email and I will send you what I need.

Best,

Dan Page

Boulder Equity Partners LLC
Direct: (303) 938-8280
www.BoulderEquityPartners.com
dan@BoulderEquityPartners.com
BoulderEquityPartners@gmail.com

[RichDennisPoorDad]

Hey guys, once again I appreciate everyone's feedback and insight.

We've narrowed it all down, I noticed some folks don't fund over 1-1.5m.

Address: New York City
Property Type: Townhouse condo
Number of Units: 3
Loan Type: 18 month fix n flip w/ early prepay (9months+)
Estimated FICO: 790 (mortgage, cars, cc’s. Nothing bad)
Renovation Budget: $1,000,000
After Repair Value (ARV: $3,300,000
Annual Property Taxes: $10,000
Annual Property Insurance: $6,000
Liquidity/Cash amounts to close: $250-$500k
Entity Name (LLC): n/a
Project experience: Multiple full gut reno alterations + full ground up developments with all permits/contracts/proof/site-walk-through available
Project experience budget: $1m - $3m (just in reno)
Role on projects: General contractor

Credit notes: Never bankrupt, no foreclosures, nothing delinquent, no felony, US citizen, not a primary residence(investment), no judgments.
House notes: delivered vacant, standard acquisition, 3300 sqft, no sqft added, exit strategy is to sell the units,

Any takers?

[Olderguy]

Is it a purchase and then rehab/renovate?

What's the purchase price?

I can do $5M and have access to more through different fund.

but what are the current as-is values...

[DBH CAPITAL LLC]

Just sent you a soft quote.

[Olderguy]

The biggest problem with this deal is that the rehab costs pretty much equals the purchase price....it's pretty much a tear down. That plus no experience on a HUD adds to the risk. I do have lenders who can do these no experience but this one is too risky for a lender. I suggested he start with something smaller like a SFR NOO where I can do 75% LTV and 100% rehab. Also seller carryback of 15%. 90% CLTV.