Hi everyone,

Hope you are all doing well.

I'm very interested in a property but don't know who can finance it. My residential mortgage guy was no help and referred me to their commercial division who said they wouldn't finance that type of property and wasn't much help either - weird because they are usually much more helpful.

It is located in NY just outside NYC and it has a building built in 2008 that includes 4 apartments. On the same 1 acre property is a stand-along commercial building.

Any ideas on where I can start to find financing for this property.

Thank you very much in advance.

You would need commercial lending for that. Residential mortgage does not apply to commercial buildings.

Thank you. I was told by the commercial lender I was using that they would not finance that property either because the square footage of the commercial/business part does not meet their requirement (ratio).

I'm going to have to ask her to clarify and tell me who would be able to finance if they can't. The commercial and rental part of this property are two separate buildings.  

@Beth Clerc , my guess is the Lender reckons the asking price is too high. ie. A loan from them would perhaps not easily be covered by the (current) income stream?

Have you prepared a good business case, including all its income over the prior two years (yes, including during Covid), as well as your own past two year income?

You say it's an acre?  How much of the land is "wasted" re. income generating capacity?

It's very hard to convince Lenders of future potential of land, if you are not an experienced and proven Developer.  But, good luck...

Not sure how things work in NY, but in CA the loan would probably be secured by a Deed of Trust which is recorded under the parcel number so it would presumably not be possible to encumber just one building on the parcel.  If you default on the loan the lender could not take just one building, but the whole parcel with buildings included.

Sounds like a commercial loan would work best since residential is 4 units or less.  I would just keep calling different options and you'll find someone.  Might take dozens of calls - be persistent.