All Forum Posts by: Tyler J.

@Tyler J. The Cap Rate is NOI / Purchase Pirce. So in your spreadsheets, it would be J13/D14. And because you bought it with all cash, your ROI, Cap Rate and CoC are all the same, 24%. You should include an IRR calculation,

 If you have other properties you can achieve this by doing a cross collateralized hard money loan. There is a balloon in 2-3 years of course. 

I have taken out 2 commercial loans in the past couple of years on a medical building and an office building. In both cases the max leverage I could get was 75%.

You can shop around (make sure to try the credit unions) but I doubt you'll find anybody willing to finance a commercial deal at 96.5% LTV. Remember that commercial lenders are going to look at the monthly income compared to the monthly debt on the deal. I don't even have to see your deal to know the numbers won't pencil out with that much leverage (especially with rates being so high)

@Tyler J.

First of all, you need to find out if the seller is even interested in seller financing.  Maybe they need the funds for their next deal, or home.

Personally, I wouldn't lean so hard on your own agent.  People seem to think agents are supposed to be able to do everything super well--- it depends on what you need or want your agent for.  You can always ask for a meeting with the seller, which is nicely thelisting agent, and the three of you can sit down (or teleconference) and negotiate this aspect of the deal.

Getting the initial $200k loan will be difficult assuming you are going with the selling price near the asking price.  You will need to disclose to the lender how the remaining $300k will be settled.  Seller financing SHOULD be more expensive than a conforming loan so the bank won't be able to approve you given what you've said.  Also, the seller would also be taking a second position lien which will be much riskier for them.  

Lets face it, anything could work since most everything is negotiable.  But, in this seller's market I'm not sure why he would take this deal.  You said it yourself, he will probably get more than asking.  Why bother taking less than what the market can give, have a 2nd position lien, and become a lender???  We just had a similar thread and the board was of the mindset of "gotta bea  way to make the deal" and/or "find a better agent to represent you.."  etc.

Put it another way:  if you were the seller why would you accept this deal?  ---- That being said, you need to figure out what the other party really needs/wants.  If it doesn't match up, it doesn't match up.  That's business, sometimes unfortunately.

Sorry I couldn't be more positive.  Good luck.