| Author |
Previous Topic | Next Topic |
|
the_mortgage_guy
1194 Posts |
 Posted - 07/02/2008 : 09:10:33 AM
|
after this scenario ...
Need ideally 75% but can possibly swing 70% (seems to be the limit thus far)
3 Fam Inv Rehab in Somerville, MA
Converting to 3 condos for sale.
Borrower is S/E
Fico: 724
Income: Full
Assets: Over 100k
Purchase Price is 750 + 300 to complete conversion
After value = 1.4-1.5 , 73-78% LTV. May have some rrom to squeeze down if need to keep to 70%.
|
|
slants
4274 Posts |
Posted - 07/02/2008 : 09:17:53 AM
|
| Is the investor aware that his buyers will have extreme difficulty in obtaining financing to purchase non-warrantable condos from a 3 unit condo conversion? Should figure into his considerations in pursuing the project. Condo conversions are very, very bad projects to get involved in right now in my opinion. |
|
|
the_mortgage_guy
1194 Posts |
Posted - 07/02/2008 : 09:47:32 AM
|
quote:
Originally posted by slants
Is the investor aware that his buyers will have extreme difficulty in obtaining financing to purchase non-warrantable condos from a 3 unit condo conversion? Should figure into his considerations in pursuing the project. Condo conversions are very, very bad projects to get involved in right now in my opinion.
I agree and no oone wants a newbie taking rehab money. The only upside is this is in the hub of Metro Boston and people love condo conversions here. It's looking at about 99% Failure rate with him being a newbie and needing about 75% After Market.
I appreciate your advice SLants and is probably what I am going to have to tell client. |
|
|
slants
4274 Posts |
Posted - 07/02/2008 : 09:53:40 AM
|
| Even more problematic than his purchase financing, if he has trouble selling them because his buyers can't get them financed (all the speciality non-warrantable programs are gone), he'll find that his $300,000 profit margin will diminish very quickly if he has to carry the project extendedly because he can't sell it. |
|
|
the_mortgage_guy
1194 Posts |
Posted - 07/02/2008 : 10:02:45 AM
|
quote:
Originally posted by slants
Even more problematic than his purchase financing, if he has trouble selling them because his buyers can't get them financed (all the speciality non-warrantable programs are gone), he'll find that his $300,000 profit margin will diminish very quickly if he has to carry the project extendedly because he can't sell it.
Good Point! I hadn't thought of that. That makes sense - nonwarrantable condo's - it just sounds scary right now. |
|
|
| |
Previous Topic | Next Topic |
|
Search for: 
