All Forum Posts by: David Bilandzija

@Jeffrey Donis good insight

@Russell VanBlon

How many units? What's your LTV on the $875K purchase price?

To give you an idea of the sort of risk aversion on these situations, the commercial lender I represent sets a max LTV of 50% on purchase loans where the subject property is vacant.

Vacant commercial properties are a gamble for lenders. Single unit office spaces can be an even greater risk than multi-unit office spaces. Debt coverage, length of lease, remaining years on lease, type of tenant, among other considerations all play into the decision. 

Best of luck!

@Davere Currie 

The website below is a super useful tool for identifying crime statistics by neighborhood/address. As an investor or lender, this is key information to glean if you are unfamiliar with an area, i.e. out-of-state. The commercial lender I represent reviews these stats and generally avoids properties with neighborhood scout crime scores under 20 (translation, this neighborhood is more dangerous than approximately 80% of neighborhoods in the U.S. with a score of 20) If we entertain a property in a higher crime area it is usually at a reduced LTV, like 60% instead of our max 75%.

I work with a mortgage broker in Ohio that sends me a steady amount of loan requests on commercial multifamily. Cleveland is one of the markets I occasionally get inquiries about.  I've been witness to a few situations where subject properties a few blocks from each other have noticeably different crime stats. Something to keep in mind going when looking.  

Disclaimer: I don't profess to be an expert on Cleveland or Ohio real estate markets but I do have several years of experience funding commercial multifamily loans throughout the region.  I totally get the appeal but beware of issues with crime, high tenant turnover, and population decline as the other poster astutely pointed out.

https://www.neighborhoodscout....

@Holly Hudson Is the subject property located in Illinois? 

@Agustin Farias

I represent a private nationwide mortgage lender that offers a 30 year fixed loan that's fully amortizing. Its a no income verification program designed for non owner occupied 1-4 unit properties and here's the kicker... we completely ignore debt coverage(DSCR), negative cash flow is not an issue as long as the property is leased and in good operating condition. We qualify borrowers based on credit and experience - very simple.

The interest charged depends on your FICO score, the program minimum rate is 5.25%.  I'd be happy to share some additional info with you if you find that you aren't bankable and need a competitive alternative.  

You can always consider lending options that ignore DTI, like no income verification loans or sometimes called asset based loans. The rates are generally higher and lenders want borrower's to have larger down payments - think 20-25%. A lot of investors use programs like these. They might be self employed and not show enough on their tax returns in some cases.

Money grab indeed. When I owned an investment SFR in Peoria, AZ the city looked at whose name appeared on the water bill. If it didn't match the owners name a use license tax form would get mailed out.

@Lorenzo Dudley First off congratulations on the purchase of your home. You found a great way to maximize its value. The last poster is spot on with his assessment. I work with an asset based lender that ignores DTI and income verification. The loans we make require a bigger down payment as a result. We look for our borrowers to put 25% down.