I need to figure out where to get the best advice.

I own commercial (quasi-agricultural) property--a vineyard/winery, which I rent to the winery owner. I have a relatively small mortgage, but the property was recently appraised at almost 3 times the value of the mortgage.

I would like to borrow additional money (about another third of the appraised value) to consolidate some consumer debt, make some improvements to the property (which will also increase the rental income), and be able to make a down payment on a residence. I need to find someone who can help me figure out the best way to do this, from a cash-flow and tax standpoint. The additional complications are that the current tenant is a personal friend, who also owes me money for some of the personal debt I am talking about. I know that the next step is to work out a property agreement between the two of us, but right now I am trying to figure out how to get the most cash, on the best terms, from this property.

I am a bit strapped in the current cash-flow department, so I can't afford to spend a fortune on advice.

Should I be talking to bankers, financial advisors, an attorney, or what? And how do I go about finding someone reputable?

I'm a lawyer, myself, but this is not my area of expertise AT ALL.

Any help in this area is appreciated!

Thanks,

Lexie

You should be talking to the commercial bank in the area.

Here is some feedback:

1- The closest bank will be most familiar with the property.

2- The fact that you have it rented is a good thing. The rental income has to be able to repay the debt.

3- I would surely hope that the estimate of value assumed that the current use was “the highest and best use”. There could be a problem if the best use currently is for residential development, but the property is rented as agricultural land. Talking from the debt service angle, it might not be enough rent.

4- Commercial loans are custom jobs, and most terms are open to negotiation.

5- Leverage for negotiation can be obtained by talking to a couple of bankers and not just one.

6- Lenders will not give you “advice”, but they will tell you what they can do for you {if anything}.

7- As a last resort you could sell the property to your friend.

Good luck

What state is the property in; CA/OR?
How large is the property in acres and what do you mean by semi-agricultural; what is around the area? other agri properties?

Depending on where the property you can borrower against it but do expect a low LTV. As loanuniverse said, try your local bank first and see what they say. Usually local Brick & Mortar banks know the area better and will take on risker local properties if the credit and financial are there.

The property is in NJ (South Jersey). 12 acres. The other properties in the area are a mix of farmland, residential, and commercial properties.