I found this deal, but not sure what to do with it.
I found a foreclosed house for sale in So. CA for $850K, which sounds like a lot. It's really a tear-down, but here is the deal:
Lender owned, approved tentative tract map, so I just have to pull permits and start building this 18 unit townhome project. Projected sales price comparables at $463k or $309.47 per sq.ft. 18 units x $450K = $8,100,000 projected gross income. Estimated time for completion = 18 months. Contractor's bid in place to build project for $2.8M. Looks like a profitable project, and for the $850K, you get the tear-down house, plus plans, tests and reports.
Now, Miss Anita was super-kind and generous and posted a hard money lender she likes about a week ago.
I don't know if a hard money lender is going to give me the $850K plus $2.8M for contractors for a loan that needs a life of at least 18 months until completion of the project. The bank/owner also wants 2 months for a closing of escrow.
Is this waaay too much for little ol' me? Or is this a real opp to make over $4M in less than 2 years?
Is there another deal in here? The bank won't go for any "and/or assigns".
Thanks for your help!