I have an opportunity with an investor who needs to free up some cash for another deal he is working on.
The property he is selling is a double lot 150x150 (2 lots not yet divided) which includes a shell for 3 townhomes on one lot, and 2nd lot is vacant land. Asking price is $300K. Lots are worth $100K each.
There is about $300K reno work to do on the shell to make 3 townhomes. I would provide that expertise, labour and materials. The breakdown is $80K Down Payment and $240K Labour and materials.
The total investment is $600K - units would sell for $250K each, so there is an upside of $150K plus the additional lot - so $250K.
Financing the deal is my issue:
The seller is willing to let his $120K note rest on the property whilst I renovate. I would put down $80K of my on money on sale.
I am unable to secure conventional mortgage as I simply would not qualify with all the properties I now own.
I need to find $100K to purchase the property. As I see it, I can JV with a 3rd party, or possibly get someone to put their name on a mortgage, if that can be done. Perhaps a family member or friend (has just occurred to me). I could use the land from the deal ($100K) as collateral.
Questions;
Do JV partners typically lend over 6-12 months and what can I expect to pay a JV from this kind of deal?
Can anyone point me to a good source of JV funding for this kind of deal?
Thanks All
The property he is selling is a double lot 150x150 (2 lots not yet divided) which includes a shell for 3 townhomes on one lot, and 2nd lot is vacant land. Asking price is $300K. Lots are worth $100K each.
There is about $300K reno work to do on the shell to make 3 townhomes. I would provide that expertise, labour and materials. The breakdown is $80K Down Payment and $240K Labour and materials.
The total investment is $600K - units would sell for $250K each, so there is an upside of $150K plus the additional lot - so $250K.
Financing the deal is my issue:
The seller is willing to let his $120K note rest on the property whilst I renovate. I would put down $80K of my on money on sale.
I am unable to secure conventional mortgage as I simply would not qualify with all the properties I now own.
I need to find $100K to purchase the property. As I see it, I can JV with a 3rd party, or possibly get someone to put their name on a mortgage, if that can be done. Perhaps a family member or friend (has just occurred to me). I could use the land from the deal ($100K) as collateral.
Questions;
Do JV partners typically lend over 6-12 months and what can I expect to pay a JV from this kind of deal?
Can anyone point me to a good source of JV funding for this kind of deal?
Thanks All