Creative Deal - Any Other Way To Do This.
Just tied up 3.5 acre property in Ocean county NJ,
There is a restaurant -Nursery & two family home on property - Total monthly rents from nursery and duplex are $4,800 - restaurant will be owned by my partner and I (partner owns one now)
Purchase price $1,350,000 Owner to hold first mtg of $1,000,000 @ 5% interest only five year balloon-
We just need 350k to do deal -
Nursery is valued at 650k for 1.5 acres it sits on and duplex around 275k - both are on seperate deeds -
Thinking of selling off nursery and using 350k for downpayment and rest cash in pocket.
Anyone have any other ideas on doing this and keeping the nursery for possible development in future. Not looking to put cash in this deal just the 6k
deposit.
In commercial finance deals, it is unrealistic to think you can get financing without putting money into the deal.
Good Luck you will need it.
Robert
[addsig]
no, not really, i know of a good commercial lender but you have to at least put down 10%. i dont know of any lenders doing 100% CLTV or LTV for commercials.
CommercialKing,
What credit rating would you consider stinko? (from a commercial lender perspective)
I am trying to finance a five unit and am considering changing it to a quad because it is so much more expensive to get the commercial loan. I would pay 2-3% less for a residential income property loan, and the lower interest alone almost makes it worth while to eliminate the "efficiency" unit, which only rents for $400 a month. If I remodeled it to connect with another unit I would have two additional rooms and be able to rent that unit for quite a bit more, but I would have to wait for the current tenant to vacate before I could do the work and up the rent.
I think that what I am trying to say is that a four unit is certainly easier to sell than a five unit, and may indeed be worth more. No idea about your homestead question; here in Michigan you can only homestead the portion of a property that you actually use- I.E. you would get the benefits on 25% of your 4-plex. I have no idea if you can homestead commercial property.
Chris
The homestead exemption is a matter of county law. Whether the assessor/collector will allow you to take a homestead exemption on a multi-family is a matter of the specific policy in your county.
Since there are over 3000 counties in the US the advice you could get here is not likely to be accurate, call the county assessor/collector and ask them.
Thanks for the reply commercialking and ypochris, I found out that I can homestead the Commercial property as long title is in an individuals name not a corporation’s name. Of course they only allow an exemption to apply to the one unit I would be living in (1/5th the total tax). Funny thing is they could not comment about the sale of the property if I was homesteading it. They pointed me to my accountant.
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I am not selling or thinking of selling anytime soon, I am just tweaking my exit strategy plans to make sure I have all the angles covered if I need to sell. [ Edited by Waylon on Date 05/17/2006 ]