Commercial Property Help

Comments(5)

• 
  Tedjr5th January, 2004

  What type loan are you qualified for? Is it hard money or conventional? Is the LTV based on purchase price or after rehab appraised value. Also sounds like you have not found a motovated seller, one that needs to sell. I work with a hard money lender that loans on the after rehab value. I am currently working on a small comercial deal with them in a small town. Trying to prelease before I buy and rehab. Have 50% preleased but need a little more. Keep hunting and find a motovated seller
  
  Good LUCK and Thank You
  Hope this helps some
  Ted Jr

• 
  DecisionMan5th January, 2004

  May I ask on what type of commercial property you've been approved?
  Is the loan a full-doc loan or some sort of stated program?
  What terms have you been given?
  Do you have a full commitment letter, or has someone just run some numbers for you?
  How will you cover closing costs?
  
  It sounds like you haven't found the right seller yet, but too, much depends on how you present your deal. If your 65% financing is truly all lined up, then at least that much will go to the seller. So I think it all begins on just how certain the 65% is.

• 
  HomeFront5th January, 2004

  The loan is pretty much all set. It is a loan on the appraised value. The loan company stated that I need some money out of pocket, probably around 10% and I should be okay. Even if I find a motivated seller I will not have the 10% to put down.
  
  Thanks for all your help.

• 
  InActive_Account5th January, 2004

  If your commitment letters are in place then simply keep looking for the those motivated sellers.
  
  However, keep those numbers in mind associated with the property ... do they work, if not, move on.

• 
  DecisionMan5th January, 2004

  Well if you don't have the 10% to put down, even after finding a seller willing to take a second, then your mortgage commitment won't be any good.
  
  Hmm. The first mortgage lender is going to want to see the seller second before closing. I bet their doing a stated loan too. So they're taking for granted that you have your 10% plus costs.
  
  So in addition to a seller willing to take a second, you'll need a seller who understands numbers, and is willing for you to write up not only a PA stating the terms of the second, but also a side agreement modifying the second under certain circumstances.
  
  For example, if the property overappraises and you revise the purchase agreement to reflect the appraised value, this increases the cash-to-seller from your first mortgage. Of course, the second will increase too.
  
  But since you don't have to verify funds, if you can get the seller to come up with the money for the "10%" and costs because they're getting more from the 1st mortgage at closing, then you might have a deal.
  
  At least that's one way to do it. This is predicated on a stated mortgage deal, of course.