Board Topic: Rental Property to secure a loan
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Rental Property to secure a loan

Posted by: lrarden Oct 22 2003, 02:41 PM
I have a townhouse that I rent and I also own .25 of another townhouse, that my mother is living in. My rental is financed the other is owned. I am wanting to purchase a small business, but can't find a lender that will use these properties to secure the loan. I am in Sacramento, CA. My e-mail is {deleted by webmaster}@hotmail.com. I am getting short on time. I also have $15,000.00 cash for a down.

Posted by: loanuniverse Oct 22 2003, 03:47 PM
Irarden:

This is not the best place to come looking for a loan. When you visit this site, you can get some pointers or advice with the understanding that it has as much value as what you are paying for it. However, I donít do loans, and would be weary of someone that contacted me offering a loan via the internet. My first instinct is that you should talk to someone local.

Regarding your situation and basing my comments on the limited information you provided, I can say the following:

- You did not say how much money you are paying for the business.

- Is the business making money?

- It would help if you gave some background information on the business, your professional experience and the assets that you are purchasing.

- Having a 25% interest on a property counts only if the other people that own the remaining 75% are willing to let a lender put a lien on it.

- You said that the townhouse where you own 25% is free and clear. Have you considered getting a HELOC or home equity loan for the 25%. As long as the other owners are willing to go along with it, that sounds like a fast and cost effective way to get some cash. Of course HELOCs have a floating rate, which is not good, but it is certainly fast.

- Business loans should be repaid with the cash flow from the business being financed. Financial information is needed not only for the lender, but for your benefit to find out if you are paying more than you should.

- What kind of equity is available on the townhouse where you have a loan?

I know that this does not answer your questions, just thought you should be aware. Hope it helps.
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