please advise,
i have a contract on a property with an appraisal of 179900. I am purchasing for 165000. My lender verbally approved me for 10% down 30 yrs at 9%. Now that i have contract in hand he wants 30%. Needless to say I am very frustrated. The property was previously an auto repair shop. I would like to convert it to flex space, office warehouse. It is L shaped. one side will be approc. 1700 sq ft the other 1200. I am proposing 17990. down with 14900.00 to come back to do interior build out. Please explain.

It is possible to borrow 90% of the "as is" value + construction costs provided that the entire loan does not exceed 75% of the completed value as determined by an appraisal. That is pushing the limits of commercial loans though.

There are however a few roadblocks.

With only $17,990 of your own funds, you would need to have the property pre-leased before the closing to ensure the property will cash flow quickly. A tough thing to do before you have finished the build out.

Your credit has to be excellant and you should show the ability to manage both the construction and the finished property.

You will need to have sufficient assets over and above the downpayment and closing costs to cover shortfalls and to demopnstrate financial strength.

You can purchase a property like this at 90% LTV. near the terms you were quoted. That would not give you the money to do the build out.

Try a different local bank that has a presence in the area where the property is located. You will also want to ask your banker if they are aware of any community or state grants that can be secured for the conversion of this type of proeprty.

One other item to note. Becuase this was an auto repair shop, you will need to check into whether it ever had underground tanks and perhaps even secure a Phase I Environmental. This can be a bit pricey at $2,500 - $5,000