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commercial1
186 Posts |
 Posted - 05/29/2008 : 08:59:57 AM
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I have a scenario for the purchase of an apartment building by the current manager. The initial problem is the buyer will not have "skin in the game" as the purchase will be enabled through a seller second, HOWEVER, the current owner will be a co-signer on the new loan with a net worth in the range of $60 MM.
I am looking for a direct lender with interest in looking at something like this, not brokers.
This is some additonal detail:
This is the framework of a potential deal that requires outside the box thinking. The seller would be more than happy to get on a conference call.
The sellers business is to buy property in foreclosure or distress, rehab them, stabilize them and sell them. His net worth is reported to be in excess of $60 MM.
He wants to sell an apartment building that he owns in Kansas City to the manager that is running it now. It is currently at 70% occupancy, but they will guarantee at least 90% by the time the deal closes.
The seller will guarantee the loan, and will also cross collateralize the deal with another property that he owns. The DSCR at 90% occupancy and a 6 1/8% interest rate would be in the 1.25X range, although under the parameters of this deal the interest rate will have to be higher.
The building manager that is buying the building has experience and the trust of the seller which is why he is willing to guarantee the loan and cross collateralize property. What he doesn't have is the money to come in with a down payment. The seller's motivation is to get this property off of his PFS in order to buy additional property.
The seller wants to take back a second of approximately $1.6 MM on the selling price of approximately $8 MM which is of course negotiable.
If you have interest, please contact me at halthouse1@aol.com.
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brad.easter
696 Posts |
Posted - 05/29/2008 : 09:48:25 AM
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Good luck. The term "less than arms length" comes to mind. I don't know anyone that will lend to someone with not only no skin in the game but sounds like doesn't have any skin to carry in case of vacancy.
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ComLender
1266 Posts |
Posted - 05/29/2008 : 10:26:46 AM
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| If the seller is staying on the loan anyway, why not just have him refinance and bring the manager into the ownership? |
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bkelly42
18 Posts |
Posted - 05/29/2008 : 12:53:41 PM
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| What did he acquire the property for? Also, are saying he value is $8mil? |
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Quicksilver
4630 Posts |
Posted - 05/29/2008 : 1:06:36 PM
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quote:
Originally posted by ComLender
If the seller is staying on the loan anyway, why not just have him refinance and bring the manager into the ownership?
Agree, just have them draw up an agreement of whatever ownership % and bring him on board, can include a buy-out clause as well so eventually he can buy-out the current owners stake. |
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PinnaclePeters
1113 Posts |
Posted - 05/29/2008 : 3:46:12 PM
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Outside of the box?
You'll need one that doesn't know what a box is... |
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