Posted by Chris-PA on September 28, 2004 at 21:20:57:
Thanks for the reply. I appreciate it. We are working on getting the property up and running, cleaned up and tenants lined up and then exit out through sale with owner financing. If you’re curious about the building, you can see it at www.allentowndevelopment.com
Chris!
Office space! - Posted by Chris-PA
Posted by Chris-PA on September 27, 2004 at 21:14:49:
Hi, We just purchased a 120,000 sq ft, vacant office building in downtown, Allentown, PA. Avergage purchase price for commercial office space is $50-60 sqFT and leases run $10-$13/sqft/yr. We paid $450,000 down, taking property subject to $850,000 in tax liens, interest and penalties. We need to cash out the property by Dec 1 to avoid judicial sale and pay off the liens. We will probably be able to knock $100,000-$150,000 of the interest off the total. We are putting together a development plan. Also, after we got this property under contract, we found out that another investor was putting together a development plan were he got letters of intent from the city and 2 local colleges for leasing space. We are negotiating with him to cooperate on his plan. What type of loan would you recommend for cash out financing? We need enough money to pay off the liens and at least $500,000 to get the property rented. It had been assessed at $7 million and will appraise for $4-$5 million.
Bridge Loan - Posted by ray@lcorn
Posted by ray@lcorn on September 28, 2004 at 10:14:50:
Chris,
You need what is commonly known as a bridge loan or improvement loan.
These loans are generally short-term (less than 3 years) with 20 year am., maybe a point over prime, can have an interest-only component during the improvements and no prepay penalty.
This type of loan product is the strong suit of local banks. Put together an investment plan that details the improvements needed as well as the costs of lease up. Sounds like there is a lot of equity, so you should be able to fund the entire cost of improvements and satisfy the existing liens. Once the property improvements are completed and the space leased, then you can pay off the bridge loan with a permanent loan, and perhaps get all or a significant portion of your cash investment back as well.
ray