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Kyle Lewis
  • Real Estate Agent
  • Los Gatos, CA
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How do I get a loan for a (mostly) vacant apartment building?

Kyle Lewis
  • Real Estate Agent
  • Los Gatos, CA
Posted Feb 22 2017, 21:12

I have a 12 unit apartment building under contract in Cleveland, OH. The building is vacant because the it has been neglected over the years. This presents a great opportunity for us to buy at a discount, rehab, and rent out at much higher rents. However, because 11 of the units are vacant, most banks are afraid to lend money for the project.

The purchase price is 170k and we estimate it needs 100k in rehab. My partner and I have great credit, income, and liquidity. The best option we've found at this point is hard money for 11 months (70% LTV, 2-3 points origination, and 10% interest) then refinance once the building is stabilized. We'd prefer to get into a loan with better terms. Anyone have any ideas?

Thank you!

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