Financing for a prop that isn't cash flowing - Posted by Frustrated

Posted by Jimmy on September 08, 2007 at 06:28:09:

Banks have different ways of evaluating rental properties. It may seem arbitrary, but these formulas are designed to protect the banks from making loans they shouldn’t make.

how do you know the tax returd information was falsified? are you guessing? if you can prove it, its a serious matter. sue the seller for fraud. of course, you have to prove up your damages.

Financing for a prop that isn’t cash flowing - Posted by Frustrated

Posted by Frustrated on September 08, 2007 at 05:53:45:

I bought an investment property/business 3 years ago in which I verified the tax returns (which later turned out to be falsified). I’m stuck with adjustable payments on it and I really need to refi, but am getting turned down because the business isn’t cash flowing, just breaking even. If I refi, I can save approx 500-700 per month in interest which will allow the property to cash flow, but the lenders aren’t seeing it. Additionally, they are treating the special depreciation I’m taking as a true expense, not a phantom expense. Can anyone give me some ideas? The loan balance is 325K and there is a 2% prepay penalty. I’m currently paying 11% as it is an SBA loan.


Posted by Jimbo (FL) on September 09, 2007 at 18:35:05:

Never heard of a bank that doesen’t add back depreciation when calculating DSCR.

Send your banker of loan officer the definition of EBITDA.

What type of business is it? How long has it been in business?

There are really a ton of questions. If you would like help, I am happy to run the numbers any time.

Re: Financing for a prop that isn’t cash flowing - Posted by JT

Posted by JT on September 08, 2007 at 11:51:49:

Hi Frustrated:

Depending on what type of property and business this one is… it can be refi with a buydown to get fixed rates below 11%. We can use income from the business as well as your personal DTI to do the loan. Loan will have to be a FULL DOC loan for rates to be below 11%. Let me know if we can help you further.