I am also a newbie close to closing on my first commercial, a 6 unit. I had very poor luck going through mortgage brokers on this commercial property and started talking to banks. My problem was not in getting accepted, it was in the time it would take to approve the loan, some estimates up to 3-4 weeks! But when I followed up with a recommendation from the sellers agent, he was able to get us approved in less than 24 hours and got the appraiser set up for this week so we should be able to close by the end of the month. Our loan is for 80% TLV at 7.875%, 25 year amortization. This is our first investment property and there was no mention of experience at all. Our building also needs some work and that was not an issue (possibly because we’re getting a $15k credit from seller at close).
There are banks out there that will do these loans with minimal hassle to you, just keep trying to find them. Hopefully you can get some good suggestions on the Commercial board.
I have one duplex under my belt and have recently found a 9 unit property that makes sense, has a positive cash flow of 1200$/month.
Problem is I can’t seem to get a commercial loan. The first bank refused saying I don’t have enough experience to manage a 9 unit. I went back explaining I might think of giving it to a mgmt co. and yet they refused on the grounds of lack of experience.
The second bank refused as there is a lot of work to be done (around $5,000 worth :)). I have an approved equity line of credit of $103,000. I showed them this saying I had cash to tide me over and yet they refused.
I have currently contacted another bank, but I am fast running out of banks. All these banks came recommended. Am buying the 9 unit for $540,000, owner taking $100,000 second, and I am putting in the rest $62,000 to make up the 30% down.
Any help will be appretiated. Did I make a big mistake of getting into commercial too soon? HELP!!
Also anybody, any more lender in the Framingham, MA area.
Posted by Stacy (AZ) on July 25, 2001 at 14:53:16:
Swati, it sounds as though you need some advice from commercial investors, and possibly a good mortgage broker. I’d suggest you post this on the Commercial Forum, and the Financing Forum of this website. Good luck! I hope you get your financing.