Owner occupied loan question for retail store

Board Topic: retail and rental business commercial loan question
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commercial load question

Posted by: keith Jul 9 2004, 04:12 AM
Question :

Wife ownes a retail and rental business. Both are the same company. We are going to stop selling and only do rentals in October when our current lease is up. Rental store paid bills and kept retail part alive past year so we want to end the dead part of selling since there is more profit in rentals.

Main purpose is to stop leasing and have our own place to pay for.
Well, I found some land and I have spoken to a builder for the new building for the rental store. Spoke to a bank manager and she said since we have showed a loss in the Retail/Rental store they could not use that cash flow in the real estate purchase and we would have to use my income from my employer for this purchase. Well, I only make $65K per year. Around $5400 per month. My current personal bills are at $3500 per month. She said it would take a few days for a decision on the loan. [B]It does not sound good to me since they are basing it off of that, does it?[/B]

They will need to loan 80% with me putting up 20% but I do not think they could even lend it anyway. Please give me your honest opinion on this!

Thanks,
Keith
South Alabama

Posted by: loanuniverse Jul 9 2004, 05:34 AM
Keith:

I really can't tell since you forgot to tell me how much the loan is for.

A couple of observations:

1- You should read my article on using personal cash flow as a source of repayment. That article shows one way of how personal cash flow is calculated. I got the example in that article from something I did six years ago. Depending on the lender, personal cash flow is calculated differently. http://www.loanuniverse.com/perscf.html

2- A viable source of repayment is the biggest factor, but others come into play when deciding a loan.

Good luck
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