Mixed-Use Property Funding

4 Replies

Hello, 

I'm not a huge forum person but I am having a difficult time finding the clear answers I am looking for. In October 2020 my husband & I purchased a mixed use property in NH in cash so we do not have a mortgage. There is a 900 sq. foot retail space & a connecting 1,300 sq. foot residence. We are in the midst of applying for the appropriate business licenses & doing as many renovations to both spaces as we can afford. It is an older property that we'd like to update & modernize, some projects are more pressing. Lending has been seemingly impossible and I understand why, commercial options need to see a profit from the business and on the residential end of things I've heard from multiple lenders that there is too much commercial square footage. I was really interested in Lines of Credit and HELOC's , does anyone have any experience in these kinds of lending options relating to mixed-use properties? Thank you.

HELOCs don't exist for commercial properties, but you can get a line of credit against your equity. Those terms are never as good as a conventional mortgage, but they're something that might work for you. Most any lender that offers commercial loans should be able to do a line of credit for you. So are you going to be occupying the retail space yourself?

Hi Cason, thanks for your response and information. We will occupying the residential space and the retail space. I will reach out to the few lenders I've been in contact with regarding business loans and inquire about lines of credit against our equity.

Best,

Megan

Originally posted by @Megan Lafaso Hercher :

Hello, 

I'm not a huge forum person but I am having a difficult time finding the clear answers I am looking for. In October 2020 my husband & I purchased a mixed use property in NH in cash so we do not have a mortgage. There is a 900 sq. foot retail space & a connecting 1,300 sq. foot residence. We are in the midst of applying for the appropriate business licenses & doing as many renovations to both spaces as we can afford. It is an older property that we'd like to update & modernize, some projects are more pressing. Lending has been seemingly impossible and I understand why, commercial options need to see a profit from the business and on the residential end of things I've heard from multiple lenders that there is too much commercial square footage. I was really interested in Lines of Credit and HELOC's , does anyone have any experience in these kinds of lending options relating to mixed-use properties? Thank you.

If the property is not rural, just get a dscr loan (debt service coverage ratio).  It's a little more than traditional financing, but it's made for properties like these.

Stephanie