This is my first post so my apologies in advance if I break forum protocol. So here goes:
We are in talks to purchase 2 mixed use properties.
#1) Cash flows well and has a LTV of about 1.42
Commercial unit has long term lease in place
(8) 1 br apartments rented about 10% below market.
#2) Doesn't cash flow with a LTV of about 1.18
3 commercial units with lease terms of 3 yrs, 1 yr and Month to Month, respectively
(2) 3 br units, one of which will be delivered vacant and one which is 50% below market
The market is very hot in this area (Hudson County, NJ) and vacancy stands at 2-3%.
Would a blanket loan be ideal in order to minimize the amount of down payment? I'm trying to do both properties separately but the bank is asking 37% down for the second property (probably not helped because of the short term commercial leases).
Forgot to add that the 2 properties are literally 1 block apart, if that makes any difference...
@Christopher Oh distance doesn't matter much. Only thing to consider is do you have different exit plans for the two properties.
If it's a long term buy & hold, I'd take the blanket loan. If it's a short term hold on either, I wouldn't.
If you go with the blanket, I'd have the loan structured in a way that allows you to sell one of the properties and repay the appropriate part of the loan. You'll need to have a lawyer work with the bank on the loan documents for that.
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