Leasing Now - Want To Buy The Building - Advice?
I own a small franchise and revenues have flatlined. Since I pay so much in rent and it will start going up annually in August, would it be smart to buy the building I'm in - w/ an 8% cap rate it is about 1.2 - or another building?
I only have $8K in business debt, but I also have limited money for a down payment, unless I took out a home equity loan. What factors are most important in commerical financing? If I got creative with 10% self-finance and 10% owner-finance, what parameters do lenders look for to hand out 80% LTV?
I currently pay around $40K gross annually. With that kind of rent, what would ballpark be for the amount I could finance? The building is around 35K sqf and 90% leased. I know the owner very well, but he currently is in negotiations with someone else - does anyone know a good method to catch his attention or interupt the negotiating?
Thank you in advance for any help!
MNInvestor
[ Edited by MNInvestor on Date 02/24/2004 ][ Edited by MNInvestor on Date 02/24/2004 ]
Actually you can get financing up to 95%...70% from the lender because it is a mixed use property/strip mall, I assume, and they will allow the seller to hold a 25% second.Which puts you out of pocket only 5%. And since you said the revenues have sunk, this type of program would be great because it is stated income/stated asset. If you get the numbers to me I will be glad to tell you what you are looking at as far as payment and rate. Good Luck!
What type of numbers do you need? And what do you mean by "stated income/asset"?
Thank you for your help!
Its quite simple really....... basically you just "State" what you make. They do not ask for verification of how much income you have nor do they verify assets. As long as you are reasonable They are pretty much basing the loan on the the property. So as long as the property appraises well you should not have a problem. I need to know what he is asking for the building in order to determine what your out of pocket cost would be as well as a payment and interest rate. If you would like you can email me at www.rachel.llg@emadisonriver.com
Talk to you soon!
Rachel
Scratch that www in front of my email address....
www.rachel.llg@emadsionriver.com
SORRY!!!
Hi Rachel,
Your email wasn't working - even without the www. I will private message you my reply along with my email.
Thanks,
MNInvestor