Funding a commercial real estate purchase - Posted by Ken

Posted by Ken on September 28, 2006 at 20:59:08:

The purchase price will be 5-7 Million, depending on how much of the property is sold.

The property is not a rehab project. It is an existing, older office building located in a prime retail location. Because of the existing income stream, the deal could be justified by the current office use alone.

The re-development of the property (probably into ?big box? retail) could come at any time in the future. Because of the existing income stream from the current use, there is not an immediate/required need to rush the re-development once the property is acquired…unlike a raw land deal or a conversion/rehab project that has no immediate income to satisfy the debt service.

Funding a commercial real estate purchase - Posted by Ken

Posted by Ken on September 27, 2006 at 21:47:24:

Question…I am looking to buy a commercial real estate property in a prime location. The property has tremendous re-development potential in addition to its existing use that produces proven income.

I have commercial brokerage and asset management experience. However, I am still young and lack a track record and the financial status to come anywhere close to having the ability to make this 6-7 million dollar transaction a reality.

I am trying to find out how to best use an investor(s). I have the relationships to find several qualified and interested candidates. My biggest dilemma is trying to figure out how to structure a partnership/deal that leaves me with ownership in the project. Because of an existing relationship with the current owner, I have an opportunity to buy the property that no other person has, not even seasoned commercial developers.

Bottom Line: I am a bringing the “deal” to the table, but need the initial investment money and financing capability of the investor(s)/partner(s). What type of partnership structure should I pursue and what could I expect my ownership to be?

Re: Funding a commercial real estate purchase - Posted by zach johnson

Posted by zach johnson on September 27, 2006 at 23:46:58:

What kind of numbers are we talkin here? In terms of purchase price, rehab/upgrade costs, and built out value?