All Forum Posts by: Terence J.

I would submit another offer (even at the same price) and ask to be present at the meeting with the sellers when the offer is presented.  That will eliminate any questions on if the seller got the offer.

Thanks for posting this topic.  It has been helpful to substantiate what I have read elsewhere.  I am currently looking at a potential investment in the San Francisco Bay Area.

While I get the DSCR needs to be 1.2 minimum does anyone know how commercial lenders view seller carry backs?

Here is an example.  Let's assume I go to buy this property:

• Purchase Price: 2,000,000
• 25% Down Payment: 500,000
• Balance to finance: 1,500,000
• Payments @ 3.8%: 6,989/month
• NOI: 8,402/month
• Cap rate: 5.49%
• Gross Multiplier: 11.66
• DSCR: 120.21%

Assuming the lender will do DSCR 1.20 this should pencil out on that end. But what if the seller is willing to carry 10%? Does that change the DSCR for the lender or is it unaffected?

Also how realistic is 3.8% interest and 25% down for northern California?  I've heard varying figures for both.  Also if anyone know a good commercial lender for the SF bay area and doesn't mind shooting me the name/number/email that would be great.

Thanks in advance for the replies!

I've bought 2 REOs.  Each time there were crazy riders they wanted signed that completely neutered all rights I had in the standard California Realtors contract.  First time out I signed it anyway.  Deal went through even though there was a lot of pain involved mainly because the property was supposed to be delivered vacant and squatters moved in.  The bank worked with me on the situation and we eventually closed.  Second time same wacky contracts and I signed.  More issues but the bank (different bank) worked through them to make the close happen.

If they accept the offer the lender wants it to close and will work with you to make it happen.  The last thing they want is to get partway towards closing and terminate. Bad move for them, they need this off the books which is why it's on the market. The longer they hold it the more the eat carrying costs and the more bad things can happen (squatters, damage, market forces dropping price, etc).  The main thing is to get it under contract, push through on all their requirements and close.  

I've had a tenant for a few years now.  He has a bed and a few clothes.  He rented the apartment to help his brother get his business off the ground.  He owns a house about 100 miles away and it at my unit only Monday afternoon - Friday morning.  

Awesome tenant, pays on time, lets me know about any issues and keeps the place very clean.

There could be many reasons for folks not to keep much.  I would definitely ask as other posters have stated.

Keep in mind it is also possible for owners to "claim a property" on Zillow and then enter their own home facts vastly skewing the value by adding sq ft, bathrooms, etc.  Yet another reason it is unreliable.