Posted by MikeD on January 17, 2002 at 18:45:21:
Ginger - Try posting this on the commercial page of the site.
PLEASE READ ---- I Need Advice/Info! - Posted by Ginger Matney
Posted by Ginger Matney on January 17, 2002 at 17:38:13:
I have a few rentals and recently found an Assisted Living Residence from a friend, of a friend, etc. Purchase price of $950,000 for the land, house and the business. The current owner has not broken the price down for each. I am young but have a credit worthy cosigner and the current owner is willing to carry back up to half of the total price. Here are my questions.
The property is zoned residentual, but used for over 65% business (assisted Living). Commercial lenders are hesitant to lend due to the lack of cash flow (current owner ready to retire like yesterday and is not trying to get residents, not even a phone book ad). They also tell me that it needs to be zoned commercial. I asked if I could get a residential loan and they didn’t know.
QUESTION: What authority is responsible for knowing/checking how it is zoned and taxed and how does that affect a mortgage company residential or commercial? Is the current owner in the gray area, or is this OK?
QUESTION: Can I purchase this property as a residential property (I will live there) and use it as the business?
QUESTION: If so, do I need to purchase the business (assets like furniture, current leases and tradenames) seperately from the residence?
QUESTION: How do you place a value on the business? I have heard that for every $1000 /mo it nets expect to pay $100,000 as a ball park figure. Does anyone have any other ways to figure it? Or, could I purchase the business using the carryback funds? Meaning the money actually purchases the business, but is a lien agianst the property (so long as the appraisal is high enough to cover it)?
QUESTION: What is the best way to use what I have to gain this no money down or little money down? Knowing the purchase price of $950,000 (she listed for $1.5 Mill). Knowing that I can put $200,000 down (loan from relative) and knowing that the owner may be able to carry back up to $500,000. Also know that even though it is zones residental, it is ok by the dept of health to be liecensed as an Assisted Living Residence and is currently licensed. I know that I can make the cash flow work in a few months and have the reserves nessicary to do so. It simply needs some marketing.
One more QUESTION: Separate Issue - How does a residential mortgage company see an owner carry back, as a down payment or 2nd mortgage? Will they loan 50% knowing the other 50% is an owner carry back. It would technically be a 100% loan
Thank you for any advice/help you can give. I have allready learned tons from this site!!!
Sincerely
Ginger Matney
grmatney@attbi.com