|Posted by: ItsMe Dec 22 2004, 05:15 PM
| I have already started the developement of four town houses in Atlanta. The land price + Development exceed $500K. I need $500K of loan to complete the development. I am doing this business through a small business Incorporation.
What R my options
|Posted by: loanuniverse Dec 22 2004, 10:44 PM
Well, it depends. The first thing I would like to know is exactly how much equity do you have on the ground in the form of land and work in progress. Actually, the first thing that I would like to know is why did you start the project without lining up financing first, but that is done so lets work with what your situation is right now…
The question here is how much more does the project cost? Options are different if you already have $400,000 worth of land and development than if you only have $50,000.
An avenue that could be taken would be to try to convince a bank lender to come in and provide financing to finish the project. The problem with this is that the convincing might not be easy if you don’t have a substantial investment in it already, that the product that you are building can be sold, and that you have the capability of finishing the project.
It really gets complicated and it could become costly if the lender structures the financing right. Then again, there are a lot of small banks out there that might be willing to do it without making sure that it is done right as long as you meet those three requirements. Just to give you an idea, if something like this crossed my desk, I would like the following at the very least.
1- An appraisal with an “as is” value and “as completed” value.
2- A report from one of our construction inspectors making sure that everything has been built to code as well as a review of the project’s budget.
3- The financial information on the company as well as the owners. You do know that you will have to guarantee this, right?
4- Information on the General contractor.
5- An answer to the question of “why are we looking at this project when it has already been started?”