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    2 Replies Latest reply on Aug 1, 2008 10:57 AM by Studio120

    Financing for a Preschhol Building

    Studio120 Newbie
      Hi everyone~

      Here is my situation:
      I have an option on a 8,000 sq. ft. beautiful brick building that was originally part of a church complex, and was used as a preschool for over 20 years. It sits on it's own lot. When the church decided to sell off the building, the preschool, which operated as a non-profit, lost it's free rent. That, along with I think a general fatigue among the board members, prompted them to close. Parents were devastated. Teachers, some of whom had been there most of the twenty years, were devastated.

      We are located in Dallas, in a desirable area of town, and each and every preschool in this and the surrounding neighborhoods are on a long wait-list. There is a definite need to reopen this building as a preschool, and the city considers it the best use of the property. Because of a shortage of parking, it is the one use that could be "grandfathered" in with no parking needing to be added.

      The option on this building is at less than half of it's current market value. It is already built out as a school, and would need only minor remodeling, to the kitchen and baths. Most of the furnishings and the built-in outdoor play equipment are still remaining.

      Basically, this is what I need in the first phase: I have a very short time to close on this building. Less than a month. Purchase money would amount to 250,000.00. This amount would be fully collateralized by the building. As soon as we close on it, we should be able to refinance it through the SBA to include the funds necessary to open the preschool. We are nearly finished with the business plan, and credit is fine. We have done all the due diligence with the city. In a worst case scenario, we have had multiple offers on this building for 450,000.00 to 475,000.00, which is strictly land value. The subject property is a desirable corner location.

      We are seasoned real estate investors, and have a great attorney, although we will be bringing in a new accountant for this project.

      Thanks in advance for any thoughts.
        • Re: Financing for a Preschhol Building
          LUCKIEST Guide
          Financing for a Preschool Building, Welcome. How do I get in touch with you??

          Sounds like a win - win situation Dallas is an interesting town and part of a church complex.

          *Would like to know who you are?? "*We are seasoned real estate investors"??

          Time is a factor. Have you developed a Business Plan that I can read.
          A Bus Plan is one of the first items a lender or investor will want to see.

          LUCKIEST
            • Re: Financing for a Preschhol Building
              Studio120 Newbie
              Luckiest

              Thanks for your reply. We are working on the business plan, which should be ready in 2-3 weeks.

              What I am looking for right now is purchase money for the building. The timeline is very tight, and I feel that getting full financing on the business will take longer than I have to perform on the purchase. It will take $250,000.00 to close. At that time, we will be ready to pursue a re-fi that will include remodel and start-up costs. When that loan is in place, the lender/investor will be paid back the purchase money. It should be a very short term deal. Worst case is that we flip the property to a developer.

              Yes, we are experienced in the real estate business, with a 17 year track record as investors.

              Please feel free to email me at reomoney@aol.com.