Strategy/finance apt/commercial w construction upfront -help

I am hoping to get some suggestions on lenders/financing styles I should seek out and also overall deal strategy with a potential mixed use commercial building. Also overall strategy on how would you go about financing one like this?

Deal specs - existing commercial building has 2 floor retail, great long term tenant who wants to stay. Potential to buy, tear down (or build up upon existing) to add 3 floors of apartments(8-10 units of 3 bedroom/2bth). This has been occuring with neighboring buildings since a zoning change a few years ago, all others are fully rented and successful, so demand is great. Purchase $1Mil, Construction estimate $1Mil - $1.5Mil, so total cost $2-2.5Mil. Excellent cash flow above expenses that would push me over my goal for annual income from "passive" investments so it is a big deal I want to do and willing to invest in heavily, but also want to have the best strategy and know who to go look for about financing it.

Assuming a std 25% down requirement, I can afford it, but would be maxing out our investment capital (thus no new projects for a while or not with cash anyway, I do an occasional rehab flip here and there). And we have excellent personal credit.

So what are my best options to finance this, and who should I seek out? Any difference in funding/who to talk to, in the fact that we would be doing construction initially? Should I asume a 25% down payment, or other options to not sink so much capital into this one asset (besides a partner)? Most of my financing experience has been traditional non-owner occupied 30yr fixed loans, so I haven't done a true commercial real estate loan before.

Overall deal strategy in relation to finance suggestions? I currently own 4, 1-2 family rentals and 1 small 2-unit office building; with the addition of this one large asset I could reach my annual cash flow goals as noted. That said I also would love to not sink so much cash into one asset where it will be tied up, both to allow for another investment down the line, and for general security of having more cash accessible. Thoughts on strategies?
Thank you, I always appreciate everyone's insight and help!

Justin G.

Edited: 02/06/2013 at 07:51PM by Administrator : Signature information should be posted in your signature.

Source: http://www.biggerpockets.com/forums/32/topics/82786-strategy-finance-apt-commercial-w-construction-upfront--help

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