Here is a question for the group that has probably been discussed a couple of times. For the newbies like myself, who do you use for commercial financing? Are there any investor friendly institutions that are willing to finance deals for a new investor with no experience? And, what would a classic loan look like in terms of interest rates, percentage down, points, years, etc. for someone in this fledgling stage of their journey?
Rate and Terms will vary of course, however we need to know what type of deal you are looking at
(Fix and flip loans are much different than rental loans)
Tarik Turner - Thanks for your response to my initial post. Currently, I am looking at a rental loan because the building doesn't need any work. It appears as though the current cap rate is 7% and the projected cap rate could be around 8.4%.
Partners Bank is giving 4.1%, 20% down, 25 year term with interest that resets every 5 years (based on prime). Loan is commercial, they want you to close in LLC or other corporate structure.
20% down does not have to be your money. You could put in 5%, have the seller hold a 15% note.
They do business in Maine, New Hampshire and Northern Mass
@Mitch Hartford What do you mean when you say you could put in 5% and have the seller hold a 15% note? I'm not familiar with this approach, but very curious
The bank doesn’t care where the 20% down payment comes from, as long as their only putting in 80%. Ask your seller to hold a note for 15%. It’s basically a second mortgage.
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