Updated over 10 years ago on . Most recent reply
Utilizing equity on a commercial property
Hello Everyone,
I have a house that I am looking to purchase that appraised at $206k as a residential home. The area it is in is in the process of being re-zoned as commercial office, and the commercial assessment came in at $347k.
The lender I have been working with will allow me to take out a loan of up to 75% of the sale price I have negotiated, which is $210k, or 75% of the commercial assessed value, whichever is lower. In this case, I would like to take out $260k so I can use $50k to fund my next project.
I am looking to hold the property and rent it out until a commercial offer comes my way, which I anticipate being between 1-5 years. The property is located in a capital city and has had strong growth. The county this property is located in is one of the 20 fastest counties growing in the US, and is in a very desirable area. In other words, I am very comfortable in this investment.
How would you seek to close the deal and in doing so, leverage some of the equity on the property in order to close on the deal? Is there a better approach to the deal that I am overlooking?
Thank you,
Aaron