Advice on how to proceed?
Hi, everybody!
We recently got a contract on our very first investment, a two-family unit where we will house-hack in one unit until the small acreage/farm of our dreams comes on the market. We did this because the farm of our dreams WAS on the market, but somebody out-offered us, so we decided to just buy a sound little investment property first and wait for our luck to change.
Well, whoever was trying to buy the farm had their financing fall through. My agent just called me and told me all about it. Apparently multiple lenders refused to do a residential loan on the place due to the number of outbuildings and the presence of too many kitchens. (It has a commercial kitchen in its renovated barn, plus two bunk house outbuildings which each have kitchenettes. The current owners used them to house interns while they were running the farm.)
It sounds like a commercial loan will be the way to go for this property. I'm on an island and buyers aren't a dime a dozen here...I think it's reasonable to expect this farm to remain on the market for at least a few more months. That gives us some time to strategize.
We are members of Navy Federal Credit Union, who offer some great residential products, but I haven't looked deeply into their commercial products yet. But other than NFCU, what other options should I be on the lookout for? We won't have 25% for a down payment until at least mid-2018; I'd like to shoot for mid-2017 to get this property. We're open to considering a number of different strategies, including working with an investor for capital or...whatever else anybody can suggest.
What should we be considering in order to get a commercial RE loan? Anything we should be wary of? If you were trying to buy this property, how would you go about it?
List price is $800K (which is pretty typical for a house + outbuildings on sizeable acreage here) but I am fairly sure the sellers would come down, maybe significantly, in order to get this property sold sooner rather than later.
Thanks for any help or food for thought you can provide!