Commercial Building Financing 400000.00

[Madan Anand]

One of my contact Restaurant Owner want to buy a commercial property in central New Jersey in a clean area. He got the down 20% payment. But No Bank Financing. He and his son work as Chef in the restaurant. He is looking for Financing. Looking for guidance. 

Thnaks

Andy 

[Christopher Telles]

You didn't say, does he not qualify for a bank loan?

If that is indeed the case then the best option would be to find a property where the seller is willing to finance a sale with a downpayment acceptable to them but also within the capabilities of the buyer.

Alternatively, find a property for lease in the area in which they want to locate and ask the landlord if they would grant an option to purchase to a qualified tenant. Do this prior to any negotiations, and then include a purchase option as part of the lease negotiations. 

An option to purchase can be a useful tool for a buyer who either does not qualify for a loan at the time of transacting or does not have the capital to make a downpayment required by a lender. The option should be written so the option provides the buyer, or s/he's assigns, the irrevocable right to exercise s/he's purchase option as per terms negotiated in the option.

The option to purchase is atypically negotiated with a fixed price, or a price escalating over time, or a price tied to the market e.g. appraised value x Y% (+/- 90-100%).

Oh, and if you're the broker in the deal make sure the broker(s) and sale commission are exclusively identified in the option paragraph.