Need Some Financing Opinions
I am looking at a commercial condo. The unit is listed for 145,000. I am considering taking out a home equity loan for the down payment and renting the unit to myself for my busines (electrical contractor)
My house is valued at 250,000. The only mortgage on the house has a balance of 130,000.
I am considering using the homes equity for the down payment because the home equity loan is tax deductible. I also want to start building equity in something.
Good idea, bad ? Since I am new to this arena I would appreciate any input.
are you a entity or a sole prop and is that an issue w/ the equity line.
related to above, if you own the condo personally and rent to the business what does that do?
SBA money is out there and is supposed to be the greatest thing since sliced bread
I personally think they are a good investment esp for a CPA, Lawer, contractor, etc.
Probably a good idea to buy a condo for your businesss. Check with your accountant or attorney to structure the loan from your personal side to your business side. Make it official. As far as the funds being deductible, yes they are. However interest on the business loan is expensible - better. Your business should plan to pay interest to your personal (even if it is deferred). Do it, but plan it right.
Good luck.
DebV:
Would please clarify your point on the business interest deduction?
Heloc sounds like a good idea, but shop around to
ensure best rate possible. I like your thinking, you
have set prices with ceiling for bid and seem
emotionally unattached. I hope they accept your initial
offer. Good luck and happy hunting!
Also consider the HELOC is a revolving account. Your bank that suggested you Tap all of your HELOC for a cash purchase, would then possibly deny you for another loan because your score may have dropped significantly from maxing out your HELOC...crazy credit system we operate in...
I would have been interested at a larger discount..you have more in the area...good spreads only...
Finding and obtaining financing.
Instead of buying a book on it, why dont you just go on down to your local banks, and talk to the business banker about commercial loans. Of course it might be a good idea before you worry about financing to target the types of properties you want to buy. The reason this is important is because different property types will get different types of financing. Different class of building will get different financing. Different DSCR will get different financing.
Another thing you might try would be to maybe go to sites like amazon and search for titles and see what pops up.
If all else fails, if you need a loan on a property, if the property does at least a 1.00 DSCR documentable, and you want to use your income a bit for global, and have a 640+ score, check with interbay funding and ask them to refer one of their brokers to you. They do Stated Income Stated Asset loans on commercial properties. They are not all things to all people, but they have done good by me.
Good luck.
I would negotiate or sue for a better price.
Did you sign the arbitration/mediation clause in the contract? You use that as a steep before suing.
Well, my goal is to avoid the double closing and of course the fees and taxes associated with it. Yes, my strategy is to sell the beneficial interest to the investor/buyer. Why do you say that he/she would not like this?
Thanks John. Is there a statute or house bill somewhere that I can read to understand further?
Are you saying that transfer tax is not due when you sell via a 1031? I thought just income tax on any profits is deferred....