How to finance high volume low dollar volume? National
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[{"id": "ggmsczg", "text": "Hey OP - can you give some more details about the actual gameplan for the assets?\n\nYou said \" I've gone from starting at $2 million in parcel to a $100,000 a parcel.\", but you didn't say what type of development, what the total project budget would be on each one, or how much leverage you would typically seek.", "replies": [{"id": "ggn5s0e", "text": "dm'ed u", "replies": [], "depth": 2}], "depth": 1}, {"id": "ggmu2hs", "text": "At that price point you dont really use financing per deal.  You just buy cash or draw on a line.  Use portfolio lending after like you said.\n\nWhy do you want to do this?  Those small properties are an absolute time suck and there is more competition for them.  Just in my experience you are going to move from more experienced sellers/lenders/title/attornies to basically dealing with sellers who have no idea what they are doing, residential brokers, lenders making their first commercial loan and worst yet unsophistacted  buyers who over pay.\n\nThat said the folks who do make money in that space all have substancial cash and lines do all acquistions like that.  Cutting a check and closing asap is part of how you get ahead of the people working random jobs who want to play landlord .  sell yourself as easy and professional to deal with to sellers", "replies": [{"id": "ggn506q", "text": "agreed. i do not like the space, in that sense. Anyone who comes to someone in that price range would sound like a cowboy.\n\nhowever, a LOC is just as bad. They're hard to lay out at this point. We may have to find a hard fund for a LOC. Lean back on older connections. It's going to be expensive money and I don't like that either.", "replies": [{"id": "ggnyu5c", "text": "If you have a blanket with a super low ltv, good track record, and good scores, any local bank will write a LOC.  What state are you in?", "replies": [{"id": "ggo61eu", "text": "We're buying peacemeal, national.\n\nA soft line is not an option.\n\nA low LTV is not necessary. At these numbers you're paying cash.\n\n  \n\n\n25 x 100k transactions in 1 year national.\n\nNot a chance you're getting a line.", "replies": [{"id": "ggo64qp", "text": "If you're paying cash then what do you want the lien for?  If you need cash do a blanket and be done with it.", "replies": [{"id": "ggo6a7u", "text": "Once acquired. You're fine.\n\nNo. That's not solving the issue.\n\nNo brokerage would touch this at acquisition. Maybe a bank would but it's so low. Maybe not.", "replies": [{"id": "ggo6ehk", "text": "For someone that needs a broker, you seem to know all the answers.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ggmy6kq", "text": "What is your strategy? Working on a ton of projects for no payoff sounds like absolute misery. A 5,000,000 SF building takes as much work as a 50,000 SF one....", "replies": [{"id": "ggn5966", "text": "Were vertically intergrating. It's a massive project, as big as anything i've done in real estate, but the money was spent in R&amp;D, not real estate. \nIt's light industrial.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ggnikw1", "text": "Pardon my ignorance, but how do you define \u201csmaller submarkets?\u201d", "replies": [{"id": "ggnlrnb", "text": "Places where 100k gets you something. Metro populations of under 1MM", "replies": [{"id": "ggnorm1", "text": "Thanks.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]