Posted by JT-IN on July 28, 2008 at 13:17:05:
CM:
You state you have an S-Corp… Each dollar an S-Corp makes each year is taxed whether you leave it in the co or take it as a distribution. S-Corps have what is called “pass-thru” which means all funds pass thru to you whether they are taken or reinvested… so no advantage to use corp dollars from a tax standpoint.
You will likely have to use corp funds anyway just to get the deal done. Plus these type of loans are getting ever so hard to get right now. Many of these type of deals involve some form of owner financing, like a 2nd mtg, which reduces exposure to the institutional 1st mtg holder. So a deal might look like this: 60% 1st mtg, 20% 2nd mtg and 20% dp. That would be rather conventional actually for larger multi fams today… Some of these deals still have assumable loans, so be sure to check that out too.
You may find some lenders to accept more risk than above, just know that the mkt is tight and things that would have easily happened a year or two ago, aren’t happening today. Make you offer accordinly, meaning tight money dictates lower prices or better terms. Before you get locked into price, know what is truly available in the way of funding.
You should run your other corp tax questions past your acct. Way too detailed to rely on anything written on a bd like this…
JT-IN