I am trying to make an offer for commercial building which is currently vacant. Asking price is $950k..
How can i get help for commercial lending and what is the down payment is needed for this type of purchase.
I am a commercial agent in Illinois.
Depending on the lender and your personnel finance. LTV 75% typical.
Also see about owner financing as an option. Some times if you a good down payment the owner may be willing to finance the balance to spread out possible capital gains on the property.
Depending on what your doing with the building you may be able to get assistance if you are going to open a business and generate some jobs check with the economic development agency in the area. There may be programs that you may qualify for. They are also a great contact for businesses looking for space if you are going to be just renting it out and not starting a business in it.
Don't be afraid to contact a commercial agent in the area to help you with this too.
If you plan to rehab it, you might consider a project / construction bridge loan combined with the acquisition loan. For that you will need about 10 -20% cash injection. You can refi when it's stable. You will need a business plan to show how you will become profitable and the timeline. I source for commercial loans nation wide.
Non stabilized is the riskiest loan for a lender therefore your going to need to find an crazy aggressive bridge lender. I think the best approach on this is a private money joint lenders. If you don't have the cash to purchase this deal and refi once you stabilize it I would not waste your time on this one.
I think what everyone is saying is what a lender would asked, how do plan to used the building, rent it out, run your own business out of it, what size is the building, what condition is the building, do have experience in the type of business the building will be use for, will seller carry, and do you have a business plan? The more you explain the transaction, the better the people here at BiggerPockets will be able to help you. Not trying to be a wise guy, just trying to help.
With such commercial properties an commercial mortgage broker is definitely the way to go. It's not just that they know the sources, but these sources know them and it's a lot easier to get your foot in the door through a broker (particularly a good one) than on your own.
If you're rehabbing a multifamily rental property you can get loans about 80% LTV that include a 2-year interest-only construction loan component. They automatically convert to 30-year conventional loans at good rates after the project is complete.
They're government-backed... the Feds are encouraging rehabs of apartments.
Heard about these at our local REIA 2 nights ago. One was in the context of a loan to convert a hotel in Missouri into mixed-use with apartments above.
Any update @Moh Said ?
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