Lending Ideas for a large (for me) purchase
Hello all!
I am looking for advice or ideas on how to make this deal work.
Property description: Recent appraisal ~ 4,000,000 - 400+ acres multiple dwellings and buildings. I have a business plan for cash flow after purchase. Close to me locally, about 15 miles from my home.
Auction- potentially going near 1 million, but 35 days closing with a nonrefundable 100k ( I wouldn’t want to go over 1.2 total with buyers fee 8% )
Me personally - net worth 1.2
Liquid- 400-500k
Banker- 700k - I have a good relationship with my banker, but I have trouble collateralizing 700k. I have a few lines for my construction company, and he is trying to use the financials of it to make it work and currently talking with him.
I don’t come from wealth, so it was a quick trial from family. I have a friend with that much in real estate, but can’t get it liquid fast enough for me to risk 100k
In my head ( correct me if I am wrong of course )
-Total equity - 4 mil
-I bring 400k
-Loan for 700k until purchase, then refi Into more favorable terms.
- cash flow pays the (high, IMO) taxes and balance on loan; net worth jumps up 3 million, cash flow a fair amount on the 400k I have invested. I probably could get more cash flow elsewhere, but I like the thought of my wealth in the land long term. And it’s beautiful, so I would like to keep forever.
More of a brain dump, I know. I apologize.
I am looking forward to any feedback and will be much appreciated. 😊. And a big thanks to BP!