When all banks are refusing, who can the investor approach for a loan to buy commercial property occupied by marijuana dispensary. It is 1 retail 100% occupied by dispensary. Located in Colorado. I am ready to put in 40-50% but still banks are refusing. What avenues can I pursue.
Since marijuana dispensaries are illegal on federal level and governed by the states, federal loan programs cannot even consider funding them. Until they are legal on federal level, private funding is the only way to go.
I own a single tenant building that is mj dispensary in Oregon. Purchased all cash. It is currently a good hedge as the marijuana business is booming during Covid Crisis (essential services like a pharmacy) and a property with no bank loan and NNN tenant is very little stress.
With the amount you are putting in, I'd approach a HML, you will pay a higher interest rate, but anything with a cannabis related tenant is nearly impossible to get a loan for.
When all banks are refusing, who can the investor approach for a loan to buy commercial property occupied by marijuana dispensary. It is 1 retail 100% occupied by dispensary. Located in Colorado. I am ready to put in 40-50% but still banks are refusing. What avenues can I pursue.
Thank you
Banks do not like this industry. Is a private equity business. You will need to raise private money from investors. Many people are looking for opportunities to get involved in the business.
Since marijuana dispensaries are illegal on federal level and governed by the states, federal loan programs cannot even consider funding them. Until they are legal on federal level, private funding is the only way to go.
I own a single tenant building that is mj dispensary in Oregon. Purchased all cash. It is currently a good hedge as the marijuana business is booming during Covid Crisis (essential services like a pharmacy) and a property with no bank loan and NNN tenant is very little stress.
Because hard Money lenders with 50% down are asking 8% interest rate. The cap rate on the dispensary is 8.5%. With borrowing rate at 8% only the cash down part is making money.
Probably higher then that, but would depend on future other uses. Cannabis businesses in general should have very poor credit rating, loads of defaults and failures. Private financing is the only way to get these done, but should be easy to find as others have said.