Possible Opportunity to Acquire Mixed-Use Building w/Grant
Hello Everyone-
I am in the process of trying to acquire a mixed-use building in my area (that is mostly in disrepair) via a master lease option. To make a long story short, the person who acquires or purchases this building will have the opportunity to utilize approximately 1 million dollars in grant money that was appropriated to help revitalize our downtown area. While the building is currently negatively cash flowing (about -$500/month according to the broker I'm working with), the owner owns this property free and clear with no encumbrances. If I was able to negotiate a deal with the owners (whom I actually know quite well), there are at least two caveats in play: (1) The grant expires if not used by the end of 2015, so I will have to look to get an extension (my contact with the city informed me they can request an extension, but only after there is a new owner in place) and (2) The repairs must be completed upfront, so I will have to obtain financing to fund the project (the estimated renovation budget is roughly 1.1 million dollars).
As part of my offer to the seller, I plan on working in a 90-day due diligence period for me, where if I am unsuccessful at securing the funds within this time period, I can walk away from the deal and they can continue to market this building to other buyers from that point forward. Does anyone have any advice that will help me with the acquisition or financing phase of this potential deal? Any thoughts or opinions will be greatly appreciated!