I'm looking into buying multi unit industrial property.
What are realistIc loan terms?
(I know this is a 'multi family forum but it was the most applicable I could find).
Having surfed the forums I see people saying 10% down and no recourse loans, to 25% down and 9% interest rate.
I'm particularly interested in industrial, as a I see a growing shortage in my local markets and I don't want to have to deal with residential tenants.
Personally I've got $2.1 million liquid. My income puts me into a 35%+ tax bracket... so taxes are a big hair cut and a loan structure that allows me to pay more interest up front would probably be beneficial (so I could deduct it).
Developer · Salem, OR · Member since 2014 · 193 posts · 110 votes
4y
We just secured a term sheet for 25% down, 30 year AM at 3.25% on a 9.7M project. (Absolute NNN at a 7cap) My banker is allowed to broker as well (Oregon area) so it gets pretty competitive, but the banks like it when he offers them the opportunity. Since he has already done 95% of the underwriting- and they know there is competition- he has been much more successful getting great terms. I like to call it Commercial Concierge Banking. My other banking experiences, when going from bank to bank have been less than positive. It almost feels like I am out trying to get a loan;( Ultimately, I am the customer and it is been a great experience when treated like one, I am pretty sure that since I am paying all the fees, points, environmental, appraisals- this puts me the position of "Customer" most banks do not realize this and instead treat you like they are doing you a favor for even letting you apply. (Not really that bad but certainly not excited that you are at the table). Having a banker in your court speaking to other banks and finding out what really is available- This has put our team at a whole new level reflected in amazing rates and huge savings.
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
4y
@Corey Philip if you are looking to defer taxes while being in a high-income tax bracket, did you consider an asset class that offers more accelerated depreciation (e.g. MultiFamily, Hotels, Conservation Easement, etc)?