how saleable a 2nd @ 90% LTV apartments - Posted by tom bridge

Real Estate Investing
1

Posted by tom bridge on September 07, 2002 at 21:19:11:

thanks dave…great informaion. i am looking to try to purchase the 25 unit @90% total LTV.

It doesn’t look like selling a second is all that useful.

best,
tom

2

how saleable a 2nd @ 90% LTV apartments - Posted by tom bridge

Posted by tom bridge on September 06, 2002 at 20:29:39:

I am looking to purchase a 25 unit apartment complex that can support 90% LTV and still have decent debt coverage.

If the seller were to take back 5-10% (80-85% first) how saleable is this if he wants to simul sell at close.

i think payout could be structure either full am at 7-10 yrs, or interest only balloon in 5-7. probably 8% face interest.

best,
tom

3

Throw-Away Second - Posted by David Butler

Posted by David Butler on September 06, 2002 at 22:10:10:

Hello Tom,

If I read this right, you are looking to find senior financing for 90% LTV, with seller carrying small 2nd. The thing is, from a note buying standpoint, that note just won’t have any investment value. To have some better understanding of why, you may want to have a good look at several discussions related to your deal specifics here…
“Commercial Note Deal Advice” at:
http://www.creonline.com/cashflow/wwwboard3/messages/10314.html

and “Want to sell my commercial note” at:
http://www.creonline.com/cashflow/wwwboard3/messages/10848.html

You’ll also find it helpful to gain a better grasp of what makes a 2nd position note more viable (though that it is rare for a commerical 2nd in most instances)…
and this thread does offer some more discussion with regard to commercial notes, and commercial 2nds, as well!!.. “Second-Fiddle!” at: http://www.creonline.com/cashflow/wwwboard3/messages/13073.html

These discussions should give you a full picture of the things you need to think about in a deal such as this!

Hope that helps, and best wishes for your success!

David P. Butler