65-70% for private money is probably the cap. If the borrower is buying the property at a considerable discount to the FMV then a hard money lender may be interested. They will still need money in the transaction and the LTV will need to be the same as above.
There are very few if any short cuts in commercial.
I am looking for private investors or any suggestions someone may have here to obtain financing for the purchase of several commercial properties. I am not a party to any of these transactions; I am a note broker assisting the Purchaser obtain financing.
Purchaser has several potential commercial property deals in Texas, and is looking for a financing situation where there would either be a simultaneous closing (or subsequent closing within 1 month) or a note closing w/ 1st payment made. The payor’s credit score is greater than 700, so that aspect is not an issue. Obviously, all of these must be structured so that they comply with applicable laws.
The reason Purchaser is looking for non-bank financing is simple: Downpayment. Banks typically want 20-30% down, which can be hefty on these deals, which are about $2,800,000, $3,200,000 and $5,100,000. There is nothing wrong with the buyer or the properties; he is only exploring alternatives to get into properties without the need to put down huge dollars. The deals are completely on the level; no one is looking to circumvent any laws, rules or regulations!
Does anyone know of a lending source that may be interested in any of these notes? Thanks.
On property values this size a seller held second should be easy to negotiate. If I was the seller I would have no problem financing 20%. If that can be done then you don’t need to go private. A lender that I broker through will do 90% up to $1Mil, so that tels me that there is someone out there that will do higher loan amounts at that LTV. There’s always a bigger fish.
90% Financing is available. 95% CLTV if the seller is willing to carry a second. If the buyer is trying to get into a property with less cash in the deal than this they may want to consider bringing in a partner.
Thanks for the reply Patrick. Do you happen to know who some of the private players may be that do 90% financing, and perhaps 95% CLTV with seller-carried second? Thanks in advance for any additional information you can provide.
Not off hand. I work primarily with institutional investors. You may want to check with other folks on the website who work mostly with private money. John Corey being one of those folks…I’m not sure if he does commercial, but that would be a good start.