Updated over 3 years ago on . Most recent reply
8 unit - financing challenges
Good evening BP
I finally found an off market property that hits all the right numbers. It’s been about a year and a half since my last deal (that was off market as well).
This property is just too large to take on myself, so I will be going in on it with a new business partner.
I could handle 8 units but the down payment is beyond my budget. Also, doesn’t hurt to mitigate the risk.
My issue lies in financing. I have been using an asset based lender and they will not fund the deal. It was expressed to me that the underwriter doesn’t feel good about the property. Some concerns were: Location, property needs some TLC, and they just weren’t comfortable with it.
So it makes me question the deal. But I just don’t see any of those being issues. Location is great, the cash on cash return is around 20% , with 25% projected in the first 6 months after rent increases to market rent, and it being stabilized. We’re talking over 4K a month in cashflow.
Has anyone else ever ran into a scenario where a lender just isn’t “fond” of the deal? And if you have, did it ever make you question the deal?