How To Guage Market Demand
I have two questions. I am new investor and looking to develop townhouses. Can someone give me a structured approach on how I can gauge the demand for town houses in the area, so far I been talking to realtors, demographics, town manager and other people in town. The property is located in a small town of PA with population of 3k and average household income of 35k year.
My second question is an age old financing question any ideas will be greatly appreciated. A little background on my deal. We got under contract 5 commercial properties include two warehouses, 1 restaurant building , and two buildings all in good condition except for one which we are looking to knock it down and build townhouses on. We are acquiring these properties from a company which wants to liquidate. Properties were sold separately but after month of negotiations we gave them package deal on all properties, the combine listed price of all properties were around 1.1 million we acquired all properties at less then half the price. Now here is my question.
1. We would like to knock down the property which is in bad condition and build 8 townhouses. How would I acquire financing with minimal cash out of my pocket? The thing going for us is the acquisition cost which is lot lower then appraised value. Which we estimate is around 700k to 800k our acquisition is 500k. Can anyone think of any creative way to finance this property?
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