Gainning Control Of A Commercial Pre-foreclosure
theres a day care facility going into foreclosure, that I would love to gain control before the bank gets it. I know about traditional financing, but dont have enough capital. The property is $1.3M, and I would need close to $200K, which I dont have.
What should be the first steps?
any suggestions appreciated. Thanks.
Some option might be
short sale
Subject-2
SBA fund
buying the note from the bank
JV w/ someone that has $$
Well, a couple of questions.
When you say the property is $1.3 million is that the asking price, its value or the amount of the outstanding mortgage?
Why do you think you need $200,000? Is that the downpayment ( odd amount given a $1.3 million purchase) or the amount the current owner is behind in his mortgage payments or what?
What do you know about running a day care?
Why is this facility not able to make its payments? What will you do differently?
$1.3M is the amount paid for in 2001 for the facility according to tax records. My partner ran a successful daycare for several years untila nasty divorce and selling. I am looking at at least $200K for downpayment because I am thinking I would need at least $15% down. the daycare was profitable under formaer ownership. The current owners bought as a n investment, and have no direct involvement in the center. I believe that and never owning a daycare before are the problems. I would be coming in with a background in education and a partner that created a successful daycare already.
I wanted to have a plan of action before I met with the owners on Monday. I will know more after tomorrow evening.
If the property is near foreclosure you may be able to do a subject-to buy and only come up with the currently delinquent payments.
Depends in part on how willing the lender is to negotiate, how desperate the sellers are.
Is there some reason you cannot do both?
Every good deal you do improves your ability to do more deals in the future. The only ones that hurt you are over-levered or over-paid for properties.
Try to tie up the pool hall property for some period with a contract (better) or option. Then find a pool hall operator to sign a lease with you. Use the lease to get the mortgage. Rented property is more bankable than vacant property with a plan.