All Forum Posts by: Eric Schleif

A good ballpark to start with would be $250 - $350 per unit or 2-3% of gross rents. If you have some concerns, you could obtain a property condition report but they cost a few thousand dollars. The report would provide detail on the current state of the building and remaining life of all capital items along with costs to replace/repair. 

@Darryl Dahlen Hahaha yeah those fees can get crazy plus take forever to close.

@Maisa Vahedi OK so the broker is asking to essentially see your PFS before spending alot of time your deal and not for a $75K deposit. That makes a lot more sense. I still have no idea where they are finding you proceeds of 97% LTV on a $2MM purchase. Banks don't offer it...or anything close to it.

What types of properties and typical deal sizes are you seeking? Are you looking for a residential or commercial mortgage broker?

I agree with you. Odds are you aren't asking that question if you are closing a loan that size. But I've found larger deposits are somewhat common in certain markets. I'm about to sign up a deal that requires a $65K GFD and last month we signed up a HUD deal with a $70K or $80K deposit.

And more thing...do not send any money anywhere without a detailed term sheet on a reputable lenders letterhead. I broker/underwrite a lot of deals and we never ask for a dime until we have a term sheet from lender that our client has agreed with. The term sheet will detail what amount of a good faith deposit is due at signing of the term sheet and the check is always made payable to the bank, not the broker. 

In reading your post one more time, is this person simply asking for a proof of funds letter that shows you have $75K or that you need to deposit $75K in escrow? Asking for a POF letter is OK in my opinion as they probably want to make sure that you have the ability to purchase/close on the deal. If they are asking for a $75K deposit upfront without even showing you a term sheet then I would run.

Is this a lender or a broker you are working with? What type of asset are you buying and what is the acquisition price? A good faith deposit of $75,000 is not unheard of, but is usually for larger deals north of $20 million. I'm guessing your deal is nowhere near this size. Also 97% LTV sounds a bit sketchy to me.

Chad Olsen any commercial bank in the country is going to review the borrower's personal financials. Some banks will certainly place a lower importance on it in underwriting a deal than others but all are required to review them.

Is it a commercial loan? If it is then It's standard and almost always spelled out in the loan docs that you will submit annual financials.

Chris Pochari I'm not sure where your example is coming from but want to make sure I fully understand the scenario... You're saying you have $1mm cash and want to purchase a $3mm cash flowing multi family building but you don't have a net worth close to $3 million. But that you do have previous experience, good credit, no bankruptcy etc. So I figure depending on the market you can get 75% to 80% of the purchase. That would leave you with somewhere between $250k and $400k in cash after your down payment. If what I wrote above is correct then you could get the deal done in certain markets like the NYC metro. I'm not sure about secondary and tertiary markets. I'd have to see the deal.

@Chris Pochari Yeah that would work.