Posted by wes on September 14, 2004 at 08:03:07:
I think you are assuming you can get a 100% loan because the loan would be for less than what the property appraises.
Lenders have this neat trick that blows that out of the water. They lend based on the purchase price or appraised value, “whichever is LOWER”.
Most hard money lenders will lend based on the value, but they usually will only lend at about 65% of that value.
If you are in fact looking at commercial properties, you might be able to get some sort of bridge loan based on value. You would need to look closely at that because the rates would be high and it might be hard for the property to generate enough cashflow for that higher rate. However, at least you might get the property under your ownership then work towards finding permanent financing.