How Hard Is It To Borrow 10 Million Dollars - Just Curious
I ran across a 300 unit muli for sale in a major city. Property generating almost 200K in income. Price tag close to 10 million, got me to thinking, If the numbers pan out and all looks good and you have 10% to invest, how hard would it actually be to borrow this kind of money. This is not a solicitation for funds, i am just curious if traditional things change when you enter this league.
Jonathan
I would think it would be pretty difficult depending on an appraisel.
You have surpassed most HML so you would need to find conventional financing, or a few HML's.
$200K in income would be nice though right?
[addsig]
A lot of HML minimum is in the millions. So they're a lot of them out there that advertise between 1 million and up. Try ****Must Reach Senior Investor status before posting URL's*** or if this doesn't show up go rapid funding.
Dee
Chances are, you would find a group of investors, who would lend you the money, but they would probally take 75-85% of profit, then you still have to pay all your expenses of the property montly, which your 15-25% may not take care of, and make it worth your wild to get.. But maybe.
Eric
[addsig]
I have a newsletter where lenders start at a million dollars min. It's not too hard if you know who to talk to. Venture Capitalists are all over the place in the Wall Street Journal. Put a presentation together and pitch it to them, if they like, you get $$$.
They'll want to see that you're competent and have a plan or have partners who have experience with that kind of thing. There's a big difference between renting a 4 plex and renting a 300 unit complex.
After that it comes down to the same old questions....
How able are you to service the debt with the property?
What is the LTV?
How much do you make personally? (eg, could you continue to make payments if the rents fell by say 60%)
How much cash do you have on hand for reserves?
They also like to see cash, specifically your cash, going into the deal. (Partners cash is ok too)
If you've successfully managed and owned complexes with 200 units, have 25% to put down have decent credit, can sell yourself and the project, and have some money for a buffer, then it's not too hard. (.....so I hear, anyways!)