Commercial real estate rehab loan
Member since 2022 · 12 posts · 3 votes
Commercial real estate rehab loan
7 Replies
- Lender · Boston, MA · Member since 2023 · 415 posts · 95 votes2y
Hi Jackie, Thank you for your service. Since this is a commercial building and a business will operate in the space, more lenders will require you to close the loan under your LLC. Now, as for financing options, you could look into getting a bridge loan. These are short-term products with a 12-24 month term with monthly interest-only payments to cover the renovation costs and refinance into a long-term loan product.
- 2yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Jackie Nguyen:
Hey folks, my parents and i just bought a commercial building and plan on making it into a restaurant. I was wondering what options we had to get a loan of approx 300k to fix up the property. The building is in our LLC. Would we have to get a loan in our LLC or should we get it in our personal name? Currently serving in the military, so if there's any options for military members, that'd be great! Thanks in advance.
Hey Jackie,
Is the property vacant? What is the current zoning of the property? Do you have history operating a restaurant for the last 2 years?
What is the current as is value, and is the property free and clear?
LuxePrivate Investments LLC 572 Reviews - 2yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Logan Singleton:
Hi Jackie, Thank you for your service. Since this is a commercial building and a business will operate in the space, more lenders will require you to close the loan under your LLC. Now, as for financing options, you could look into getting a bridge loan. These are short-term products with a 12-24 month term with monthly interest-only payments to cover the renovation costs and refinance into a long-term loan product.
A bridge loan could work, but the exit is what will be harder since many lenders do not offer long term financing for restaurants themselves. If it's considered a Retail Building and you happen to have a restaurant occupying one of the units for at least 12 months, this will be a smoother transition to long term financing.
LuxePrivate Investments LLC 572 Reviews - Member since 2022 · 12 posts · 3 votes2y
Quote from @Erik Estrada:
Quote from @Jackie Nguyen:
Hey folks, my parents and i just bought a commercial building and plan on making it into a restaurant. I was wondering what options we had to get a loan of approx 300k to fix up the property. The building is in our LLC. Would we have to get a loan in our LLC or should we get it in our personal name? Currently serving in the military, so if there's any options for military members, that'd be great! Thanks in advance.
Hey Jackie,
Is the property vacant? What is the current zoning of the property? Do you have history operating a restaurant for the last 2 years?
What is the current as is value, and is the property free and clear?
Current zoning is commercial on and commercial strip. I do not have experience, but my parents do years ago. They are also real estate investors, so they have plenty of real estate as well to show. Property is also vacant. We just need to funds to update the property and buy the appliances.
- 2yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Jackie Nguyen:
Quote from @Erik Estrada:
Quote from @Jackie Nguyen:
Hey folks, my parents and i just bought a commercial building and plan on making it into a restaurant. I was wondering what options we had to get a loan of approx 300k to fix up the property. The building is in our LLC. Would we have to get a loan in our LLC or should we get it in our personal name? Currently serving in the military, so if there's any options for military members, that'd be great! Thanks in advance.
Hey Jackie,
Is the property vacant? What is the current zoning of the property? Do you have history operating a restaurant for the last 2 years?
What is the current as is value, and is the property free and clear?
Current zoning is commercial on and commercial strip. I do not have experience, but my parents do years ago. They are also real estate investors, so they have plenty of real estate as well to show. Property is also vacant. We just need to funds to update the property and buy the appliances.
If it's vacant, the terms on a bridge loan won't be great and it will be costly. Have you looked into tapping into the equity of other rental properties your parents own to complete the project? Either through a HELOC or Cash out Refi?
LuxePrivate Investments LLC 572 Reviews - Member since 2022 · 12 posts · 3 votes2y
Quote from @Logan Singleton:
Hi Jackie, Thank you for your service. Since this is a commercial building and a business will operate in the space, more lenders will require you to close the loan under your LLC. Now, as for financing options, you could look into getting a bridge loan. These are short-term products with a 12-24 month term with monthly interest-only payments to cover the renovation costs and refinance into a long-term loan product.
Thank you for that. Is there any other loan options? I have been reading up on the SBA 7a loan. But this is a new business venture and so im scared it might be hard to secure a loan when we can’t really provide profit margins and etc. there are rental properties on the llc that we could use as collateral if needed
- Member since 2022 · 12 posts · 3 votes2y
Quote from @Erik Estrada:
Quote from @Jackie Nguyen:
Quote from @Erik Estrada:
Quote from @Jackie Nguyen:
Hey folks, my parents and i just bought a commercial building and plan on making it into a restaurant. I was wondering what options we had to get a loan of approx 300k to fix up the property. The building is in our LLC. Would we have to get a loan in our LLC or should we get it in our personal name? Currently serving in the military, so if there's any options for military members, that'd be great! Thanks in advance.
Hey Jackie,
Is the property vacant? What is the current zoning of the property? Do you have history operating a restaurant for the last 2 years?
What is the current as is value, and is the property free and clear?
Current zoning is commercial on and commercial strip. I do not have experience, but my parents do years ago. They are also real estate investors, so they have plenty of real estate as well to show. Property is also vacant. We just need to funds to update the property and buy the appliances.
If it's vacant, the terms on a bridge loan won't be great and it will be costly. Have you looked into tapping into the equity of other rental properties your parents own to complete the project? Either through a HELOC or Cash out Refi?
Haha, i didnt think of HELOCs or a cash out. I appreciate that for sure!
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