All Forum Posts by: Eric Schleif

In your scenario you are asking for 100% financing and no bank will give that to you. They want you to have skin in the game. The bank's term sheet or commitment letter will state that they will lend you the lessor of XX% of the appraised value or purchase price. I'd imagine you would be looking at 75% to 80% financing of the purchase in your scenario.

It's difficult to comment on the rate without at least a general ballpark of the size, general location, and status of the asset. If it's a cash flowing 20 unit building in NYC then it's a terrible rate. If it's a distressed 8 unit building in a tertiary market of Texas then it's probably a great rate. I get the feeling from your second post that your should first see what you can afford with a 20% - 30% down payment to start your building/ loan sizing and see where that leaves you relative to the local market. That's probably going to be your biggest constraint. Then focus on cash flow and other factors. But to answer your initial question, there are lenders that will lend on longer terms. Many lenders can go 10 or 15 years, Freddie has a great SBL program for deals between $1mm and $5mm, FHA can go up to 35 years, and HUD can go up to 40 years. But again availability of these loans all depend on the size, location, and status of the asset. Best of luck.

If the buyer is using a bank to finance the acquisition, then their bank would require the c of o to be correct. I actually closed a deal last year in midtown Manhattan where the seller didn't realize the c of o allowed for retail use of the 2nd floor, as he was renting it out as an apartment. The retail use increased the building value exponentially and since my client was hard on the contract the seller couldn't back out of the deal.