I'm looking for financing for a project that I'm working on getting under contract. I currently in the process of buying 37 acres that I'm looking to put nightly/executive rental cabins on. There are currently 3 single family rentals on the property that are producing about $1,500 a month that will be phased out as the property gets closer to finished but are currently producing income for the property. What I'm looking for financing/ bridge loan for is construction of 8 rental cabins that will when finished produce around 16,000 a month in rental income, and getting the property ready to build on. I'm looking to borrow 3,000,000 short term with a future value of around 7,000,000. I have about 35% of my own money and the property.
The three mobile homes now $1,100 a month= $13,200 a year
The 8 rental cabins annually $576,000 gross monthly (If used as vacation rentals @ $200 nightly as I stated in my previous email at 100% rented and before operation costs)
$460,000 gross at 80% rented + $13,200 = $473,200
$403,200 gross at 70% rented + $13,200 = $416,400
$345,600 gross at 60% rented + $13,200 = $358,200
$288,000 gross at 50% rented + $13,200 + $301,200
If at any point they fall below 50% for more than 2 quarters the property will be either a listed as a business and all sold together or B subdivided and listed and sold which ever will bring the money in the quickest.
As executive rentals ( the operation cost is a lot lower here than with the nightly rentals so the profit margin is a lot smaller)
$230,400 at 100% rented + $13,200 = $243,600
$184,320 at 80% rented + $13,200 = $197,520
$161,280 at 70% rented + $13,200 = $174,480
And would have the same exit startigy in place as the nightly rentals if falls below the 70% mark for more than 2 quarters.
Would you be able to get this done?
It may be tough to get financing if you don' have any development experience but there will always be someone willing to talk to you about it . More info is needed but you might want to try a commercial mortgage brokerage out of Santa Monica called Financial Compound. The owner will be straight with you on the chances of getting it done. I used to run into commercial deals years ago and they were always willing to listen and guide me. Never did a deal with them though.
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