I have a project located in Las Vegas the value of the property with the existing building that has been done to date is right at 78 million they need a loan for 67 million with the 1st draw being 44 million.
They are tapped dry due to they have put 24 million of their own funds into the project and need the money ASAP due to the note from their current lender is due there is a 1st lien that will be taken out for 28.7 million and the lender will be in 1st position.
They are also open to a JV partner. They do not have funds for large upfront fees and we have a MAI appraisal we are a broker and need this deal done they need the funds by the 20th of this month.
Please email me only if you can help on a project of this size and needs this quick a funding. I also want to note that this is for residential condos.
Full Version: Las Vegas
I do not see how you could be closing on this deal by the 20th. There is too much involved to do the whole thing so quickly.
I think your best bet is to look for someone to provide the $28.7 million to take out the bank and then work on the rest of the money needed to complete the project. Off the top of my head, most people looking at this would like to know:
- Number of units under contract? What kind of deposits?
- Are we talking substantial cost overruns?
- Why is the lender backing out?
- Full sales reports to determine absorption. My guess is that there have been few or no sales in the last few months or cancellations have been brutal.
- The date of that appraisal. If it is older than 6 months in this market it has little value.
- Where are those initial $44 Million going to? We established that $28.7MM are going to the lender, but where is the rest going. If some is going back to the principals, why?
I think that there is an opportunity in this market to make a lot of money by providing financing to projects in distress like this one. Most if not all lenders could not give you an answer in the short-window of time that you give. I would be very skeptical if someone said that they could be closing by the 20th. The best way to approach this for your borrower would be to bring in another developer as a partner so that funds could be infused into the project. With the additional equity in hand have a meeting with the lender to see if they could get the additional funds to finalize construction. I know that this does not help the broker much, but starting a loan process with a third party lender at this stage would be difficult to pull off in time.
Also, it might be time to revisit those unit sales prices if that has not been done already. In my market, I am seeing projects that were expected to sale 10 units a month selling one or two units {if they are lucky}. There is something to be said about holding out for your projected sales price, there is another one to be said for saving some skin.
Credit/Risk people are learning about the importance of a presales requirement before allowing vertical construction disbursements. Those lenders that did not build these controls into their construction loan structures are finding themselves with half completed buildings with units whose market value has deteriorated wiping a lot of that cushion you thought you had at underwriting time.
I think your best bet is to look for someone to provide the $28.7 million to take out the bank and then work on the rest of the money needed to complete the project. Off the top of my head, most people looking at this would like to know:
- Number of units under contract? What kind of deposits?
- Are we talking substantial cost overruns?
- Why is the lender backing out?
- Full sales reports to determine absorption. My guess is that there have been few or no sales in the last few months or cancellations have been brutal.
- The date of that appraisal. If it is older than 6 months in this market it has little value.
- Where are those initial $44 Million going to? We established that $28.7MM are going to the lender, but where is the rest going. If some is going back to the principals, why?
I think that there is an opportunity in this market to make a lot of money by providing financing to projects in distress like this one. Most if not all lenders could not give you an answer in the short-window of time that you give. I would be very skeptical if someone said that they could be closing by the 20th. The best way to approach this for your borrower would be to bring in another developer as a partner so that funds could be infused into the project. With the additional equity in hand have a meeting with the lender to see if they could get the additional funds to finalize construction. I know that this does not help the broker much, but starting a loan process with a third party lender at this stage would be difficult to pull off in time.
Also, it might be time to revisit those unit sales prices if that has not been done already. In my market, I am seeing projects that were expected to sale 10 units a month selling one or two units {if they are lucky}. There is something to be said about holding out for your projected sales price, there is another one to be said for saving some skin.
Credit/Risk people are learning about the importance of a presales requirement before allowing vertical construction disbursements. Those lenders that did not build these controls into their construction loan structures are finding themselves with half completed buildings with units whose market value has deteriorated wiping a lot of that cushion you thought you had at underwriting time.
QUOTE(loanuniverse @ Oct 12 2006, 03:00 PM) 
I do not see how you could be closing on this deal by the 20th. There is too much involved to do the whole thing so quickly.
I think your best bet is to look for someone to provide the $28.7 million to take out the bank and then work on the rest of the money needed to complete the project. Off the top of my head, most people looking at this would like to know:
- Number of units under contract? What kind of deposits?
- Are we talking substantial cost overruns?
- Why is the lender backing out?
- Full sales reports to determine absorption. My guess is that there have been few or no sales in the last few months or cancellations have been brutal.
- The date of that appraisal. If it is older than 6 months in this market it has little value.
- Where are those initial $44 Million going to? We established that $28.7MM are going to the lender, but where is the rest going. If some is going back to the principals, why?
I think that there is an opportunity in this market to make a lot of money by providing financing to projects in distress like this one. Most if not all lenders could not give you an answer in the short-window of time that you give. I would be very skeptical if someone said that they could be closing by the 20th. The best way to approach this for your borrower would be to bring in another developer as a partner so that funds could be infused into the project. With the additional equity in hand have a meeting with the lender to see if they could get the additional funds to finalize construction. I know that this does not help the broker much, but starting a loan process with a third party lender at this stage would be difficult to pull off in time.
Also, it might be time to revisit those unit sales prices if that has not been done already. In my market, I am seeing projects that were expected to sale 10 units a month selling one or two units {if they are lucky}. There is something to be said about holding out for your projected sales price, there is another one to be said for saving some skin.
Credit/Risk people are learning about the importance of a presales requirement before allowing vertical construction disbursements. Those lenders that did not build these controls into their construction loan structures are finding themselves with half completed buildings with units whose market value has deteriorated wiping a lot of that cushion you thought you had at underwriting time.
I understand what you are saying in reference to them closing by the 20th the client is in a bad spot and needs to get this thing done ASAP! They have 91 of the 144 in the 1st tower under hard contract. The current lien holder is private monies from my understanding they are ready to get back their funds and place them elsewhere. I have spoken to a couple of hedge fund groups that we work with closely and they could not move quick enough and stated that I may want to go with hard money. I am sure that we can get another week or so on the closing time they just want a solid LOI/Commitment from a capable lender who will not take large upfront monies and leave the scene.
This may be a little out of date as I am new to the forum, but I would like you to know that I have done a little over $700M in condo financing in the past 2 years and would be glad to assist you in the future if you come accross another opportunity related to condo development.
Thanks,
AM
Thanks,
AM
It doesn't say what they are building? My guess is it has something to do woth residential condos, SFRs, etc but if not this deal is more doable (not by the 20th but they could get an extension on their current loan. Also, is all the due dilligence reports already done? Some money up front is necesssary but it depends on what has and has not been done but everyone including legitimate lenders that will et the deal done want to make sure their costs are covered. Everything not used is refundable.
You guys are aware that the original post was about six months ago, right?
I know about this Casino project. It has been going on for two years.
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