Updated about 9 years ago on . Most recent reply
Tired of hearing "NO"
I have been on this forum for a while now. I realize one of the biggest problems in real estate is finding capitol to invest with. At the risk of sounding just like one of the many other people complaining about the difficulty finding capitol here goes my story....
I am currently developing a property, or trying to at least, and I cant find enough cash to continue building. Without wasting too much of your time about the property, business or location, I can assure you its a slam dunk. From day one I have been netting thousands of dollars a month with minimal investment. I have shelled out tens of thousands of dollars on an amazing set of construction plans, site plans, permits etc yet the loan I was planning on being there, fell through. I have gone to 4+ banks over the course of 2 years and I keep falling flat. I have put together an amazing business proposal for the banks but I keep getting denied.
I'm at my whits end! This project is literally a home run yet I cant find a penny to throw at it. After receiving the first couple "no's" I decided to build the first duplex on my own. I used cash, low interest credit cards, and I did much of the work myself in order to save money and get it done. It was completed last June, rented months in advance, and the tenants are still there, happy as can be. But most importantly, the house was profitable from day one.
Cut to today, I have been looking for a large loan to continue construction of 3 more duplexes and I have come up flat. I am so sick of applying for loans and hearing banks tell me "No". There is zero reason to deny me the funds. All of my investments are making money hand over fist. I am in a great area and the housing I am building is in HUGE demand. I want to blame it on the fact that traditional banks are unreasonable but instead of pointing a finger I am hoping to find another way. I dont know any private lenders and I really prefer not to give equity in my business away but I dont see any other way to continue on with my progress.
Any advice?
Most Popular Reply
You have a situation that is hampered by your unwillingness to properly position this "project" for the lending you are seeking. You have a residential use development parceled as a commercial project. 4 assets on one parcel is not going to be looked at seriously by any conventional lender/commercial lender. You need to subdivided it most likely. Your next issue is that you are not into the project with any of your own money (debt service is not investment capital...it's debt), and your "equity position" is based on an incomplete project profile. Lastly, you're looking for the money in an arena that is not likely to provide fruitful (as you have discovered) and rather than waste more time doing it wrong, I would start by repositioning the project so it can be attractive for a Private Investor, Crowd Funding Campaign or JV with someone that has the cash to complete the project.
Good luck.