Lack of Dev. experience (workaround)
I'm starting my first development, converting a small 2 story office (+/-8,000 sqft.) Into a dozen studio apartment. I've flipped residential properties before, but 2 lenders I've had preliminary discussions about this project both stated that my lack of experience may be an issue. I get this project is technically commercial. But aren't I just as good as my team? As long as I have an experienced contractor and subs, shouldn't that be enough? Most developers aren't out there laying brick, bending conduit and soldering pipe. This isn't a high rise or anything complex. I see it as a really big residential project.
My question to you is is there a workaround that you have seen or justification to persuade the lenders. I Have spoke to banks. So they operate by a different set a rules. I have access to some private and HML. But the rates will be high and for a project that will take 9 months interest will easily run into the 6 figures. I may have to bite the bullet?
I would appreciate if anyone can provide some insight from a lender, developer, or a RE enthusiast perspective?
The “easiest” way will be to partner with a more experienced mentor - essentially the partner gets free upside while you get your deal done. I’ve seen this arrangement work out very well, but obviously you’ll be giving up part of your deal. Still, 2/3 of a deal is better than 0/3 of it.
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