All Forum Posts by: David Coronado

Hi BP, I’m currently in the process of remodeling my second house with a 2 in 1 loan (construction and refinance). I’m planning on adding square footage and several bathrooms. Once the construction is complete the refinance mortgage will be 88% of the future value of the home. Here is what the bank is charging for the loan, Origination Fee (1%) - $4,050 Closing Cost - $1,715 Title Fee’s - $2,800 Total Cost $8,565 The Mortgage will be at 5% interest rate. Are these fees too high? They originally wanted an origination fee of 2% but when I said it was too high they easily went down to 1% with a required 5% Mortgage interest rate. This is a local lender in Salt Lake City Utah. Am I getting ripped off or are these fee’s normal? What do you think? Thanks!

@Henri Meli What kind of BS stories have you heard in the past from sellers? 

@Schuyler Hayes and @Omar Khan I agree, I think that's the hardest part of selecting from all of these wholesale deals from these email list is figuring out which ones are in a good location. How do you source your deals?

Hi BP,

I've recently signed up for a few Whole sellers emailing list. I'm excited by all of the potential properties but I'm having a difficult time figuring out which ones are the winners for me. I'm curious to know what is the most difficult part of analyzing a property you experience?

For example,

1. Location
2. ROI on Flip or Hold
3. Amount of work needed to Flip or Rent
Etc

BP,

I'm interested in understanding the deal structure for long term development projects between private money investors and developers. For example if I were to be interested in buying and developing properties in part of a city, that a city has rezoned from industrial use to mix-user corridor, office space and high density. Essentially establishing a downtown for a city that has never had a downtown. What is the typical deal structure for a investor who is investing into a 10 - 20 year development project?

I understand a project of this size would require a full time team of Architects, Urban Planners, Commercial construction team etc in house or hired out with prior experiences.  Along with a master plan of phases and approach for approval with the city. 

I'm just curious to understand the deal structure for long term developments between developers and private money investors? 

If you have any book recommendations that would be great too. 

Thanks BP Community,

David

Hi BP,

I've been buying houses, remodeling them and then selling them in the Bay Area for the past couple of years. I now want to take on new developments, buying a lot, building a new house and then selling it all under my newly formed business llc. I'm trying to understand the process of how to get approved to buy the land and then get approved for the construction loan all under my business llc?

Here is an example of what the finances would look like. I'll use simple yet realistic numbers for those who are not familiar with the Bay Area real estate market, 

Example Business - Real Estate Developer LLC
Lot Price - $1,000,000
House Size - 3,000 Sq Ft
Construction cost per square foot - $500
Construction Cost = #2,445,000
Total cost to Build = $3,445,000

Sell Price = $4,500,000 
Average square foot per area (Palo Alto and Mountain View) - $1,500

Construction Cost Breakdown

Construction Cost @ $500 a square foot	$1,500,000
Contractor Fee 10% of construction cost	$150,000
Civil, Mechanical, Electrical and Structural Engineering & Architect Fee 30% of construction cost	$450,000
Permit Cost 1% of Home total value	$45,000
Site Work & Landscape 10% of construction cost	$150,000
Contingency 10% of construction cost	$150,000

Land Purchase Breakdown

Downpayment 20%	$200,000
18 Month Mortgage Payments	$95,000

I know the land purchase will require a 20% downpayment ($200,000) and the construction loan will also require a 20% downpayment ($489,000). Then it will take about 18 months for the city to approve and finish construction from the date of the purchase, so I will need $95,000 to cover the mortgage payment, insurance and the property taxes of the 18 months.

Investment - $784,000


I have the cash in hand now and I am curious about how to get approved for the land purchase and the construction loan all under my business llc. In the past I've been buying the homes in my name and using my income to get approved for the purchase. How can my business llc get approved for the land purchase and the construction loan?

-David

@Joel Owens thanks for the feedback, this was my first post on BP. I'm looking to develop properties, Office Space in the Bay Area. Between 5,000 sq ft to 15,000 sq ft.  

Don Konipol & David Faulkner those are both great suggestions. I'll reach out to a few brokers to help me find what I am looking for.

Hey Everyone,

I've been buying residential properties and renovating them for the past two years. Then have made a return after refinancing after leasing them out. I am now interested in buying and developing commercial properties. I am working with a architect and have access to capital. I'm curious to know what have been some the best/favorite tools you have used to find commercial properties?

Here is a list of my current tools:

-Property Shark (to look up details of off-market properties)

-Loopnet (See what is on the market now)



Bonus question: Is Loopnet a good resource for Commercial MLS Search?

Thanks,

David