Hello Everyone,
I have come across a mixed use commercial property and was wondering where I can find the best loan (high LTV, low closing costs, good rates). The property is currently one building, owned by two different people. One half of the building is 7500 square feet and is an old bowling alley. The asking price is for the Building only, not the business, as it has not been open for about 5 years so no P/L statements are available. I am not sure if I would re open the bowling alley or switch it over to something else. The other half is 7500 sq feet of "office space". The current owner has an apartment in one of the units. The other units are rented out to an insurance agent, a tanning salon, a grain supply store, and a redemption center. All leases are month to month. In total the commercial side could have 8 units to rent. The owner of the bowling alley will carry a second mortgage for half of whatever they sell for. The asking price of the Bowling Alley is 85000, and the commercial half is 140,000. I have 750 credit scores and make 75k a year. I have been looking around and the best I can come up with is 10% from me, 10% seller second mortgage, and 80% from the bank. Can I do better than this? What would I be looking at for closing costs? I own residential property but this would be my first venture into Commercial prop. Any advice/things to look out for would be greatly appreciated. Thank you.
Full Version: Mixed Use Commercial Property Loan
80/10/10 is a good deal as far as amount of money coming out of pocket.
Just make sure that the pricing is right {compare with pricing advertised by local financial institutions or contact a few}. That the maturity is the longest possible {if they insist in 5 year maturity, ask for a ten year maturity and a repricing at five instead}, and that the amortization used is high {if they want to use 20, inquire about 25}.
Just make sure that the pricing is right {compare with pricing advertised by local financial institutions or contact a few}. That the maturity is the longest possible {if they insist in 5 year maturity, ask for a ten year maturity and a repricing at five instead}, and that the amortization used is high {if they want to use 20, inquire about 25}.
I agree w/ LU. 80/10/10 is nice indeed outta pocket.
QUOTE(gmink21 @ Feb 19 2006, 12:49 AM)
Hello Everyone,
I have come across a mixed use commercial property and was wondering where I can find the best loan (high LTV, low closing costs, good rates). The property is currently one building, owned by two different people. One half of the building is 7500 square feet and is an old bowling alley. The asking price is for the Building only, not the business, as it has not been open for about 5 years so no P/L statements are available. I am not sure if I would re open the bowling alley or switch it over to something else. The other half is 7500 sq feet of "office space". The current owner has an apartment in one of the units. The other units are rented out to an insurance agent, a tanning salon, a grain supply store, and a redemption center. All leases are month to month. In total the commercial side could have 8 units to rent. The owner of the bowling alley will carry a second mortgage for half of whatever they sell for. The asking price of the Bowling Alley is 85000, and the commercial half is 140,000. I have 750 credit scores and make 75k a year. I have been looking around and the best I can come up with is 10% from me, 10% seller second mortgage, and 80% from the bank. Can I do better than this? What would I be looking at for closing costs? I own residential property but this would be my first venture into Commercial prop. Any advice/things to look out for would be greatly appreciated. Thank you.
I have come across a mixed use commercial property and was wondering where I can find the best loan (high LTV, low closing costs, good rates). The property is currently one building, owned by two different people. One half of the building is 7500 square feet and is an old bowling alley. The asking price is for the Building only, not the business, as it has not been open for about 5 years so no P/L statements are available. I am not sure if I would re open the bowling alley or switch it over to something else. The other half is 7500 sq feet of "office space". The current owner has an apartment in one of the units. The other units are rented out to an insurance agent, a tanning salon, a grain supply store, and a redemption center. All leases are month to month. In total the commercial side could have 8 units to rent. The owner of the bowling alley will carry a second mortgage for half of whatever they sell for. The asking price of the Bowling Alley is 85000, and the commercial half is 140,000. I have 750 credit scores and make 75k a year. I have been looking around and the best I can come up with is 10% from me, 10% seller second mortgage, and 80% from the bank. Can I do better than this? What would I be looking at for closing costs? I own residential property but this would be my first venture into Commercial prop. Any advice/things to look out for would be greatly appreciated. Thank you.
I also have a mixed use property for which I am looking for a refinance. Great credit score, would like 25-30 amort., low rate, low loan fee, fixed 5 or 10, 75% or less LTV. Apartments over retail. Fully leased for 3 years. Portland, OR Ratio of retail to res. is about 60/40. Do you know a good lender for these type of properties?
QUOTE(gmink21 @ Feb 19 2006, 12:49 AM)
Hello Everyone,
I have come across a mixed use commercial property and was wondering where I can find the best loan (high LTV, low closing costs, good rates). The property is currently one building, owned by two different people. One half of the building is 7500 square feet and is an old bowling alley. The asking price is for the Building only, not the business, as it has not been open for about 5 years so no P/L statements are available. I am not sure if I would re open the bowling alley or switch it over to something else. The other half is 7500 sq feet of "office space". The current owner has an apartment in one of the units. The other units are rented out to an insurance agent, a tanning salon, a grain supply store, and a redemption center. All leases are month to month. In total the commercial side could have 8 units to rent. The owner of the bowling alley will carry a second mortgage for half of whatever they sell for. The asking price of the Bowling Alley is 85000, and the commercial half is 140,000. I have 750 credit scores and make 75k a year. I have been looking around and the best I can come up with is 10% from me, 10% seller second mortgage, and 80% from the bank. Can I do better than this? What would I be looking at for closing costs? I own residential property but this would be my first venture into Commercial prop. Any advice/things to look out for would be greatly appreciated. Thank you.
I have come across a mixed use commercial property and was wondering where I can find the best loan (high LTV, low closing costs, good rates). The property is currently one building, owned by two different people. One half of the building is 7500 square feet and is an old bowling alley. The asking price is for the Building only, not the business, as it has not been open for about 5 years so no P/L statements are available. I am not sure if I would re open the bowling alley or switch it over to something else. The other half is 7500 sq feet of "office space". The current owner has an apartment in one of the units. The other units are rented out to an insurance agent, a tanning salon, a grain supply store, and a redemption center. All leases are month to month. In total the commercial side could have 8 units to rent. The owner of the bowling alley will carry a second mortgage for half of whatever they sell for. The asking price of the Bowling Alley is 85000, and the commercial half is 140,000. I have 750 credit scores and make 75k a year. I have been looking around and the best I can come up with is 10% from me, 10% seller second mortgage, and 80% from the bank. Can I do better than this? What would I be looking at for closing costs? I own residential property but this would be my first venture into Commercial prop. Any advice/things to look out for would be greatly appreciated. Thank you.
Based on your info, this is categorized as a mixeduse property but all lenders including us, would look at this as a tier II property. The office and special purpose space (bowling alley) out numbers the residential and half of which is vacant (Bowling alley).
Cash flow i am ASSUMING would be poor. Based on this, even on a full doc you would be required to put down atleast 20%. Based on past experience i would say that you would be able to get a 70-72% ltv loan and that would be the maximum.
If you really want this property, you need to address the bowling alley and get it to produce income (make rental to another operator a condition of sale etc). To give you a better sense...just look at the deal from an underwriting perspective....a half occupied special purpose property that will be 90% leveraged. The two negatives here are the special purpose nature of the bowling alley and its ding on the cash flow. Of course location and price would also be a mitigating issue. If you are getting a property at 70 cents on the dollar, there could be something here.
I would be very wary of a brick and mortar bank saying they will do 80%. Usually is an inexperienced loan officer reading a matrix that sez "Yeah 80%....we can do that no prob..." that is until you have a $2,000 appraisal done.
Cash flow i am ASSUMING would be poor. Based on this, even on a full doc you would be required to put down atleast 20%. Based on past experience i would say that you would be able to get a 70-72% ltv loan and that would be the maximum.
If you really want this property, you need to address the bowling alley and get it to produce income (make rental to another operator a condition of sale etc). To give you a better sense...just look at the deal from an underwriting perspective....a half occupied special purpose property that will be 90% leveraged. The two negatives here are the special purpose nature of the bowling alley and its ding on the cash flow. Of course location and price would also be a mitigating issue. If you are getting a property at 70 cents on the dollar, there could be something here.
I would be very wary of a brick and mortar bank saying they will do 80%. Usually is an inexperienced loan officer reading a matrix that sez "Yeah 80%....we can do that no prob..." that is until you have a $2,000 appraisal done.
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