Has anyone here built a commercial property?

Question

Is it realistic that I would be able to qualify for a loan to build a hotel or apartment complex? I only make $36,000/year. I wholesale on the side but have not done a deal yet.

What does it take to conduct market research to make sure it will be profitable?

Chinmay J. · Answer

You should absolutely do it. Also ask them to throw a Cadillac in the mix.  Definitely can't hurt. Whatchu gotta lose? Let us know how it goes..

Martin Z. · Answer

@Chinmay J.  LMAO, funniest thing I've read this week.

"You should absolutely do it. Also ask them to throw a Cadillac in the mix."

Michael Le · Answer

Hi @Patrick Philip, I don't want to be mean and I'm sure you don't mean for it to be, but your post seems almost like a troll post. But to answer your question, no, it is not realistic at all. Anyone you deal with, not just a bank, will require that you not only have knowledge of hotels/apartment construction but also have significant financial skin in the game before they would work with you.

I commend you for jumping into real estate but take a more logical and realistic approach at it. You don't always have to start in residential but starting in commercial requires capital. And doing development is another step up even.

Patrick Philip · Answer

Thanks. I think what I'm going to have to do is generate cash through wholesaling and rehabbing until I can put a down payment on a highly leveraged hotel.

Ryan Franklin · Answer

@Patrick Philip Good for you, man! Don't let these people mess with your head. There's nothing wrong with asking the question...that's how you find out the answer! While you may not be in the position to do what you're aspiring to do with conventional methods, at least you're figuring out the ways you CAN'T do it, so that eventually you can find a way you CAN. I commend your courage and aspirations!

Patrick Philip · Answer

@Ash Patel I'm a fast learner. I have experience running a trailer park.

@Martin Z. I know someone who does just that (without the Cadillac)

Ash Patel · Answer

Do you have any experience in running hotels?  Why would someone entrust their failing roadside motel to you?  If that's what you want to do, start working nights as a front desk clerk, move up to night auditor then manager.  After you have successfully GM'd a hotel, you will be in a better position.

Patrick Philip · Answer

@Jimmy Klein it's not a bank, it's a private lender. I would be happy with a roadside motel. How did you get into hotels? Did you have lots of money from something else?

Jimmy Klein · Answer

Not sure if it's a troll post, but I'll bite. We own hotels and no way a bank will finance you 75% based on just that income. You might be able to purchase a roadside motel but no way would you get financing for development of a new hotel.

On another note we can sell you a hotel and will even seller finance 25% of it. We will need full and complete personal guarantees and a complete title tied to the property. Annual interest will be 18%. If you miss a single payment we will file for foreclosure. Also the selling price is 75% higher than normal as we are seller financing. Doubtful if it will appraise, but if your interested let me know. :)

The above is an example of a situation where someone would finance 25%. Also my offer is serious if you want it. :)

Patrick Philip · Answer

I have found private lenders willing to lend up to 75% based on the income of the property. Now, I just need the owner to cover the remaining 25%. Unfortunately, one of them would have to hold the second mortgage position. Why would anyone want to do that?

Has anyone here built a commercial property?

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