BiggerPockets

Two Commercial Properties - Texas: Both properties are under long term lease, have great location and are in very good condition. They have been on the market for $900,000. The owners need to liquidate ASAP as they are in financial trouble with other property. They have accepted an offer of $500,000. Lease income is $12,000 per month. Appraised value is in excess of $750,000.

Gill-

Well first and foremost congrats on getting an amazing deal in comparison to the sales price. Well the answer to your question would be it depends on the actual numbers of the property- income, expenses, NOI, location, exact equity in the property.

If the building is significantly stabilized, there may be no need to go hard money (depending on various factors). If the new borrower has good financial's, the property has equity (and appraisal numbers come out in line with expectations), cash-flow is enough to cover new debt service, location is non-rural, and leases are in place, you can show "skin in the game"- (whether it be actual equity or POF- we have structured deals both ways), you can almost always go conventional (some factors do not necessarily have to be evidenced- though the more you have, the better obviously).

On the other side of the coin, if the property is not majorly stabilized, borrower financial's are not as strong as we would like, and trailing 12 months NOI is not sufficient to cover debt load, we may have to go hard money.

Though again we would need to see more information to find out which channel would be the proper and most efficient means to complete the deal.

Our investors are very active in Texas- we are looking at a 600+ Acre redevelopment project for an recreational park (RV Park) North East of Houston. In addition we are looking at a Joint Venture equity deal for a trucking station that the principal's are coming with 50% of cash on the table- for a 50% LTC- loan to cost.

We would definitely be interested if the majority of the stipulations are met either for hard money or traditional financing. As I said, our investors are already looking in TX, as well as in the Midwest. We honestly believe there are much better deals out there as opposed to here in our home Manhattan, NY- prices are still inflated here and need more time to cool down.

Please send me more information about this deal. Also I highly urge you to view our site to find out of more info in terms of the deals our investors have financed, and which deals we are aggressively seeking.