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Wildewinds
51 Posts |
 Posted - 05/13/2008 : 3:22:59 PM
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Got a client whose house happens to be a "legal nonconforming use in the current zone."
A letter from the city says "The reconstruction, repairing and rebuilding of any nonconforming/noncompatible building damaged by fire, explosion or act of God or the enemy shall not be prohibited, provided that the cost of such reconstruction, repairing or rebuilding shall not exceed fifty percent of the reasonable replacement value of the building immediately prior to damage."
My question to you guys is: Who is this "enemy" they're talking about?
Oh yeah, what kind of loan could anyone get for a property like this? He wants to do a refi at around 50% ltv. |
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nowbroker
934 Posts |
Posted - 05/13/2008 : 3:41:35 PM
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Just in case Al Kaida bombs your clients house, you could rebuild it.
The problem with this wording is that most lenders will run. If the house has a substantial fire, and it costs 53% of replacement value to fix, the borrower and lender is stuck with a half burned out house and lot that cannot be repaired. The city will then require it to be destroyed at additional cost to the borrower.
A portfolio or private lender would be your option at a low LTV like that. |
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gilbert
133 Posts |
Posted - 05/13/2008 : 7:02:57 PM
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I have a deal right now very simular in San Bernardino "NoN-Conforming Commercial". I have to go down to city planning and submit a request for 100% rebuild letter. They are charging $600 per property and may or may not approve it. It needs to be approved by the planning commission. I was told when I went down there last year if they do approve it that it will never need to get approved again.
When I did the loan on these properties 3 years ago the Lender didn't even care if they could rebuild or not. Those were the days...... |
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Wildewinds
51 Posts |
Posted - 05/13/2008 : 10:24:05 PM
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| Good info, Gilbert. I'll try that out. Thanks. |
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