Hello all,

I've come across an amazing, one-of-a-kind property with enormous potential. However, I'm a technology professional, not a real estate guru. I've got some great business ideas utlizing the property, but don't know how to get started. Can anyone help?

Here are the details:

* Property cost is $1,300,000
* Cost to refurbish, upgrade infrastructure, etc. is yet to be determined, but probably around $1M
* Initial Equipment cost of about $500,000
* So total funding needed is about $3,500,000, including working capital

* I have very little experience with real estate, but I think I understand most of the fundamentals
* I'm basically broke (well, not really, but there is no way that I can come up with 10%)
* Cash flow from this business has the potential of being very rewarding

What is the best way to approach this? Find a real estate investor to handle the property side, while I tackle the business aspect? Attempt to get a $3.5M loan? Attempt to find an angel investor/venture capitalist willing to give my startup $3.5M in exchange for equity? Go back to work tomorrow and pretend like I never found this amazing property?

Thanks for any guidance anyone can give.

Eric Reid
reidek@gmail.com

What are all those expenses?

You don't have a real estate investment here.... It looks more like a startup business with those expenses.


Different risk profiles.

Yeah, it is a startup business. However, the business plan depends on this property. I'm trying to figure out how to get funding for both at once. Surely I'm not the first entrepreneur who needed to buy some property to get his business started, am I?

I have no problem seperating the two, if I can figure out how. If I can figure out how to buy the property, and seperately get startup funding, then lease the property from one of myself, that would be fine too. I'm just not sure how to get started.

I'm assuming I can't get a 100% LTV loan on the property, but if I can, that would solve half the problem. The business side I can tackle the more traditional way.

Thanks again for any assistance that anyone can provide.

The problem here is that it is much easier to do the real estate deal than it is to do a loan for a startup. Assuming that the property is not too much of a single use property, you have a lot of places to go to for a real estate loan.

It will be a lot more difficult to obtain startup funding for a business. We are talking limited sources of uses there.

And no…. there is no 100% financing.

And I also think that any lender that does startup financing {I have never worked for one that does}, would want to see at least one third of the total cost come from equity and come in first.

Do not want to sound harsh, but it is just the way it is. You need someone to be an equity partner or a lender willing to subordinate. Either way, it is going to hurt.

The main thing I want to do is get ahold of this property, since it won't be on the market long, and once its gone, its gone.

I found out a little more about the property. It looks like I can get it for around 70% of the MAI appraised value. Maybe even less. Are there lenders out there that would give me a 90% LTV loan, in essence providing some startup capital? Obviously I won't be able to immediatly accomplish my entire plan as described, but then I'll have the property and can develop a lot of sweat equity, and build things up a little slower.

Anybody have any creative ideas for me?

Thanks!

Oops, didn't realize I wasn't logged in. The above post was from me.

Also, the "startup capital" described above would be more used for refurbishment, rather than equipment, etc.