Comercial RE Financing

[Drew]

Looking for some advice from the more experienced commercial investors:

I have found many properties in my area that are in good shape financially and are being offered at reasonable prices.  One particular property is being sold at a current (not proforma) cap rate of 12%.  The problem is that I don't have the cash for the downpayment, and I can't find a commercial loan above 90% unless it's a rehab loan.  If I were buying for cashflow, I wouldn't want above an 80% loan anyway since the rates skyrocket.  Can anyone suggest a means of financing the final 20% and closing costs, or does anyone know of a commercial mortgage lender who will do a 100% non-rehab loan?

[commercial loans]

Looking for some advice from the more experienced commercial investors:

I have found many properties in my area that are in good shape financially and are being offered at reasonable prices.  One particular property is being sold at a current (not proforma) cap rate of 12%.  The problem is that I don't have the cash for the downpayment, and I can't find a commercial loan above 90% unless it's a rehab loan.  If I were buying for cashflow, I wouldn't want above an 80% loan anyway since the rates skyrocket.  Can anyone suggest a means of financing the final 20% and closing costs, or does anyone know of a commercial mortgage lender who will do a 100% non-rehab loan?

I don't see you getting 100%. Will the seller do a hold back? 20%? Can a local bank do a second?

[commercial lender]

100% financing doesn't exist in commercial lending yet.

[Destini]

Do you have a 700+ credit score?
Try 100%cltv or combo loan.

[commercial lender]

Ask the seller if he will hold the paper. There are many tax advantages for him.

[tedjr]

Howdy Drew:

I am working on a rehab deal with private loans for the 5%  that the HML is requiring. I plan on getting a cash out refinance when the project is completed and rented. It is expensive to have to get two loans but with my credit history I see no other way. Hopefully everyone can make some money and the project will be a big success. Just one way to do a deal with a few grand as earnest money and appraisal money up front as being all that is needed.

[klopper]

Maybe the seller will hold a second and pay the closing cost.
Its a depressed market you never know unless ya ask.....

[4EEM]

You can get 95% CLTV if the seller is willing to take back 20%, as long as the other 5% is not a loan and the seller does not contribute more than 3% towards closing costs I don't see a problem.  Keep the golden rule in mind:  "S/He who has the gold makes the rules."

If you cannot come up with atleast 5% of your own funds on a commercial deal you don't have any business buying a commercial property.  


My $0.02

[black95gt]

"If you cannot come up with atleast 5% of your own funds on a commercial deal you don't have any business buying a commercial property.  "

See, that is wrong right there.  Some people true...but others that are willing to put forward the effort to do something should be able to have the chance.  I came accrossed an oppurtunity that will have a positive cash flow of $1600 with a 20% vacancy $3,500 fully occupied, which would more than double my regular job salary, but its looking like i cant because my parents werent rich and i dont have $150,000 to put down.  I am fully capable of going through with this project, but its looking like i have some hurdles to overcome.   The thing that bothers me the most is if it were a 4-plex and i could prove the same kind of profit, i could get the loan.

[rbw]

Find someone (aunt, uncle, friend,whoever) to put up the downpayment cash and offer them a good ROI, If that is the only problem you are having that is.

[black95gt]

what is an ROI

[rbw]

return on investment.

[black95gt]

ok, say i was to find somebody to put the $100,000 down (20%), what would my interest rate be on a $400,000 loan?

[rbw]

Example: They put up the downpayment and you give them their money back at an agreed time plus interest....


First though see if you can get the deal yourself, but whenever a deal is good the money will be there..sounds stupid but it's true.



 

[rbw]

I dont know what your rate would be.

A mortgage broker could help you there.