Condo Conversion in Los Angeles - Profit Margin
Looking at the project as a potential bridge loan. Property is 10 units in a good location in West LA, mid 90's construction all large 2 bedroom units (1500 square feet avg). Sponsor is purchasing for around $500,000/unit and budgeting $35K in capex to improve interior/exterior of property. Beyond that, I am unsure what the costs would be for wrap insurance, admin costs for HOA, etc. But end of the day, the sales comps for similar vintage condos in the market indicate $750,000-$800,000/unit for 90's vintage similar sized.
My biggest concern as the bridge lender would be what happens if they can't sell the last 2-3 units and how do I get paid off. Assuming they could get individual mortgages on each to take out the bridge facility, but wanted to run it past the forum for any insight.
Bump, this sounds very interesting. Are you the lender or the broker?
If you are the broker, I know a lender who would love this deal. PM me if interested.
interested as well
23$ psf for capex seems light
Agree with Chekdastack . A West LA Multifamily building priced at $333 PSF is going to need more than $35K Per Unit to get the property into a suitable enough condition to sell off as condos. Personally, I would either revise down the sales price or revise up the capex.
Obviously, I haven't seen the building so take these opinions with a grain of salt.
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