All Forum Posts by: Cason Acor

JV with another investor is the path of least resistance. Even if you find another partner that brings most the equity, getting some of a deal is better than getting nothing. There are a bunch of bridge lenders that will do short term preferred equity investments as well.

If you get any other loan in addition to the seller carry, you'll have to make sure that the seller is willing to be in second lien position. Any serious lender will make being in first position a condition of the loan, even if the seller is still carrying most of the debt. That's going to be your biggest hurdle to overcome. You're better off finding a partner to come up with the rest of the 20% needed.

Not currently zoned for residential usage, so you won't be able to get a conventional loan. You also wouldn't be able to get a commercial loan because it's not an income producing property. You could try for a bridge/construction loan, otherwise you're going to have to pay cash.

You're going to want some type of bridge or construction loan. 

I advise my clients to be the one to schedule the phase 1. Lenders never move as fast as you want to, and that's just one less thing to put in somebody else's hands. Also, a phase 1 is part of due diligence which you'll want done prior to waiving your due diligence contingency, and before beginning your financing contingency.

I believe it can vary among states, but where I'm at, phase 1 reports are only good for six months. So yes, you could use one from a previous escrow as long as it's within the allotted time frame. Call an environmental inspector local to where the property is located and confirm with them.

I'm a commercial broker. I use CoStar to pull property lists with a lot of the aggregate data that they track. Depending on your market, they'll have a lot of detailed info about the properties. However, I've found that their ownership records are accurate at best only 50% of the time. So I'll pull a large property list to get information like addresses, size, age, etc., then use programs like Landvision and LexisNexis to get accurate ownership information.

CoStar is also good for tracking transactions and comparables if you live in a state that requires disclosure.

Disputing property tax assessments is very common. People do it all the time. But you’ll get the best answers from a New Jersey attorney who is familiar with both the municipality and property so that you can underwrite accordingly. 

I would just go with option number one. That's the easiest and most common solution.

Did your attorney not walk you through the logistics when he made the suggestion? I’ll defer to the other attorneys on here, but that sounds like a lot of extra headache to me. 

In my market, a property’s assessed value is almost always around 50-70% of the market value. In the state that you’re purchasing in, are you required to report the sales price upon closing?

Yeah that’s a non-starter for me. If you’re providing the equity, you should have full access to the financials and all of the underwriting. Two things if I were you: 1) I would seriously reconsider doing this deal because if you went a long with what they want, it would make it extremely easy for them to lie to you. 2) If you still want to do the deal, I would refuse to put up a penny unless you have full access to all financials. 

That’s an odd dynamic. I think regardless of who’s putting up most the equity, I wouldn’t want to partner with anyone that pulled that with me. They’re essentially asking you to invest blind and on the good word of your lender? 

What is your partnership structure? Who’s responsible for what and where is the equity coming from?