Renovation of a motel to apartments

[Douglas J Andrews]

Hello All,I identified a motel that would make great apartments approx 14500 sq feet total. Calculating an average apartment size of 800 sq ft going for a median price of $750 a month conservatively. I calculate you could get about 18 apartments. If the property can be obtained and renovations completed with 1 million. I realize I’m a bit out of my depth here. I have not tied this up and need advice on how to proceed without losing out on the opportunity?

[Barry Ruby]

@Douglas J Andrews

Hi Douglas, if you are intent on this property your best bet is to get it under contract with contingencies.

A key element in making your purchase offer is doing a critical path analysis to determine the steps, time, players and capital needed to pull the deal off.

To save yourself time and aggravation, make your first pass offer the the form of a term sheet. The critical path will guide you in determining drafting the terms and conditions of your offer. In particular it will help to establish milestones, the amount and timing of earnest money payments and closing.

Closing should be tied to having all required permits in hand as well as the debt and equity capital needed to fund the project.

If you decide to go forward DM me and I will send you an example of a critical path analysis and term sheet.

Best of luck.