Ideas for commercial financing - Posted by Kurt

Posted by SteveO on March 15, 2009 at 14:16:32:

Lenders have typically been gunshy about no-money down deals. Commercial is very difficult to get any financing for these days.

Are you saying that commercial are the “big boys” and multi-family investors are not?

Ideas for commercial financing - Posted by Kurt

Posted by Kurt on March 05, 2009 at 17:15:40:

Given everything that is going on is it possible to get 100% financing on commercial property? Is there a creative way that would work in today’s market that would allow me to put zero out of pocket.

Thanks for any suggestions!

Re: Ideas for commercial financing - Posted by Reginald Ollison

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Re: Ideas for commercial financing - Posted by brandoncbsre

Posted by brandoncbsre on March 06, 2009 at 20:05:12:

Cam is right.

You pretty much have to put equity into the deal. You can cross-collateralize with another asset if you have something with equity to offer.

Re: Ideas for commercial financing - Posted by cam

Posted by cam on March 06, 2009 at 19:12:47:

only if the seller holds the entire note.

Re: Ideas for commercial financing - Posted by Dave

Posted by Dave on March 07, 2009 at 06:25:32:

THe only way I see to 100% financing is to find a deal with an assumable loan. We are working on one right now where we can take over the existing loan, only paying closing costs. This gets the distressed seller out of the picture and creates a great deal for the buyer.

Re: Ideas for commercial financing - Posted by Mark (SDCA)

Posted by Mark (SDCA) on March 13, 2009 at 08:48:58:

So are you saying that if an owner holds a 2nd for the balance then a 1st position lender wont loan anything ie they wouldnt do 30/70?

Re: Ideas for commercial financing - Posted by Kurt

Posted by Kurt on March 07, 2009 at 11:16:39:

Thanks for all the comments. I wish some of the suggestions would work for this situation but I don’t think they would too easily.

I am trying to buy a single NNN tenant building in the 5-8M range. I only have about 100k of my own which I prefer not to use anyway.

Has anyone had any success in keeping the seller on title and/or doing a possible second carryback in order to circumvent the downpayment the lender would require? Or are lenders getting too gun shy about these kind of deals also?

If somehow I could make it work with nothing out of pocket or very little I would like to buy multiple of these buildings. Seems like my pursuit of single families and apartments is not getting me to my financial goals. It’s time to get in with the ‘big boys’.

Thanks to all…

Re: Ideas for commercial financing - Posted by Mike

Posted by Mike on March 07, 2009 at 04:35:50:

You may also try buying it below the appraised value with a hard money loan or a business line of credit. Having the seller hold the entire note would also work.

Re: Ideas for commercial financing - Posted by SteveO

Posted by SteveO on March 15, 2009 at 14:09:31:

Most of the no money down deals will still require a strong buyer with liquidity. My experience has been that people price too much into these no money down deals also. They tend to come around about the same time the bank does and are usually underperforming.

Re: Ideas for commercial financing - Posted by DMcGehee.SF

Posted by DMcGehee.SF on April 13, 2009 at 23:46:48:

If you only have $100k in equity and don’t want to use it you should not be thinking of purchasing a $5-8M building unless you are sponsoring a partnership and pull in some real equity into the deal.

Our firm is having some difficulties getting financing and we are cash heavy, have the track record and are low levered.

While a NNN property is considered safe by many, now is not the time to take on way more property than you can afford. You leave yourself no contingency plan with only $100k on a $5-8mil property that is 100% levered.

Start smaller and build up, there are plenty of great opportunities at lower price ranges. We have a distressed asset fund that is very active right now, and believe me, we are buying most of our deals fom “big boys” who bit off way more than they could ever chew. Now they are paying the ultimate price and are left with nothing.

From all my recent interactions with lenders, liquidity is vital and they want to see strong equity positions especially is more volatile markets.