Accountant · West Palm Beach, FL · Member since 2014 · 6 posts · 0 votes
I have this commercial deal currently and I'm looking for 100% financing or other creative ways to structure the deal. (I keep getting mixed feedback, some people say no some say yes 100% financing is possible)
Hotel/Motel
Current Appraisal $2mil
Accepted offer $900k
120 rooms
ADR $60
Occupancy 30%
Rev $700k
PIP needs to be completed with a Rehab Loan (additional loan needed)
Scottsdale, AZ · Member since 2014 · 659 posts · 536 votes
11y
I was able to get a 100% hard money loan on a similar deal. They even loaned me money for some fixup. It did cost more money as the lender wanted to participate in some of the upside.
But they did this with the understanding that I had done a number of turnaround deals. I also had my own crew for the repairs.
So, yes it is possible but may hinge on the lender's confidence in you and the project.
Scottsdale, AZ · Member since 2014 · 659 posts · 536 votes
11y
I was able to get a 100% hard money loan on a similar deal. They even loaned me money for some fixup. It did cost more money as the lender wanted to participate in some of the upside.
But they did this with the understanding that I had done a number of turnaround deals. I also had my own crew for the repairs.
So, yes it is possible but may hinge on the lender's confidence in you and the project.
I was able to get a 100% hard money loan on a similar deal. They even loaned me money for some fixup. It did cost more money as the lender wanted to participate in some of the upside.
But they did this with the understanding that I had done a number of turnaround deals. I also had my own crew for the repairs.
So, yes it is possible but may hinge on the lender's confidence in you and the project.
good advice
Basically the bank calculates risk of the deal (obv). The more they know you, your ability to deliver, and your history, the less risk YOU are and they may be willing to take more risk on the deal. The more risk you are, the more capital they are going to want from you.
Syndicator and Fund Manager · Victor, NY · Member since 2012 · 760 posts · 345 votes
11y
@Account Closed
You might be able to get a 100% loan to cost loan, but you likely can't do it without at least HAVING some cash.
You'll have to paint the picture of how you or your partners can come to the table for any future capital needs. It's absolutely possible, but difficult to say the least. The lender will also want to know that you have experience in hotels (or experienced management in place). They'll also want to look into you're ability to get the funding for the PIP.
If you lose the franchise agreement because you can't fund the PIP, then suddenly your value goes way down.
This sounds like a decent value add opportunity assuming the market STR report looks good. If you can't get financed maybe bring in a partner. You'll get some equity, cash flow and most importantly, a resume booster (assuming you haven't done this already previously)