Commercial real estate acquisition

Board Topic: Commercial acquisition
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Commercial acquisition

Posted by: dswinton Nov 30 2004, 05:25 PM
If a client has a purchase for 300k, yet the lender is commiting to 177k, should a higher LTV be what I shoot for? The client has cash for the other 35%, but it will burden them to bring this much cash to closing.

Give me some suggestions.


Posted by: loanuniverse Nov 30 2004, 06:52 PM
Shooting for a higher loan-to-value is of course to the benefit of your client, but you forgot to mention several things in your post. The most important of which is what type of property is being purchased.

For that low loan-to-value, my guess is that it is either distressed or unproductive such as land.

If on the other hand, you have income producing property that cash flows enough to pay a higher level of debt, you are talking a different situation here. Of course, the loan-to-value is not only dictated by purchase, but also by appraised value so that might be another reason for the low number.

Posted by: Commercial Lender Dec 1 2004, 06:48 PM
I gather you mean a 60% LTV. As the admin would help if you posted a FICO, property type and transactions detail. Maybe we can give you a few suggestions/closing solutions.

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