Re: 15% over basis? - Posted by Ed Garcia
Posted by Ed Garcia on February 07, 2001 at 10:34:58:
Who ever told you that didn’t mean Banks, they meant, Mortgage companies.
The reason is, that mortgage companies sell off or broker their loans.
When Tom below, explained that in most cases, a bank will go purchase price, or appraised value, which is ever lower, he is right. However, after saying that, that formula is NOT CARVED IN STONE. I am currently doing a loan with a small bank on an office building with 100% financing. If you walk into a bank, they will tell you, that cannot be done.
Savage, Banks make loans based on CREDIT WORTHINESS. They make loans to PEOPLE and then collateralize it. They are what we call a full lending facility, they can make loans on anything, cars, boats, personal loans, credit lines, real-estate, air planes, etc. When I teach investors how to get a WORKING CREDIT LINE, that line is designed as a Business Credit line, not as a Real-estate line. They look at the real-estate, as the businesses inventory as an example.
I realize that at time this all can become confusing. One minute you might see me give advice on how to have a bank 100% finance a property, and then the next minute you’ll see me tell you that it can’t be done. The reason is because of the way I’ve identified the deal, the qualifications and circumstances of the borrower, and the chosen lender.
As I’ve said before, this business is not always carved in stone.