Mixed Use Financing Question - Posted by BobTheBuilder

Posted by BobThe Builder on June 13, 2007 at 16:12:51:

The assessed value is $520k and I can get it for $400k if I act quickly. Should the busines make the purchase and rent to me or vice versa? Thank you all in advance.

Mixed Use Financing Question - Posted by BobTheBuilder

Posted by BobTheBuilder on June 13, 2007 at 10:37:46:

I have the opportunity to purchase a 2-story Retail building which has a legal apartment on the second floor. I would like to run my business from the first floor and live in the apartment. In a year or two, I will build a house then rent the apartment.

The building sits on 4 acres and can be subdivided as well.

Since I have owned my business less than a year, my bank isn’t intersted in lending me the money. What route should I take for financing? Is this considered a home-based business? Can I get a home loan for this? Also, what kind of down payment do I need?

Thanks in advance. And thank you for the advice you gave to my previous question regarding build or buy existing commercial property.

Re: Mixed Use Financing Question - Posted by Mark(NC)

Posted by Mark(NC) on July 06, 2007 at 23:06:04:

what about setting up an S corp or LLC to purchase the property, then lease it back to your business and also to you so you can show the income stream from the rentals as the cash flow to make the deal work?

Re: Mixed Use Financing Question - Posted by Jorel

Posted by Jorel on June 22, 2007 at 10:16:15:

I just worked on a very similar situation for a frined of my wife’s. Retail shop with huge apt./condo on top. Bank wouldn’t touch it. Not too much of a problem. Run the numbers by me and I have a few contacts that either will be able to take it or I’ll be able to steer you in the right direction. Send me all the financials you have and we can go from there.

Re: Mixed Use Financing Question - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on June 19, 2007 at 09:27:41:

Don’t have enough info to give any real insight into the financing available to you, but you can check out this rate sheet (http://www.chaseb2b.com/content/portal/body/wholesale.subprime.Rates.do) to get a rough idea of the rates available with a 25% downpayment.

Higher LTV’s are available and depending on loan amount, location, credit, etc. rates and terms can very to a good degree.

Re: Mixed Use Financing Question - Posted by ray@lcorn

Posted by ray@lcorn on June 14, 2007 at 11:25:20:


You may be a candidate for an SBA loan. One of the criteria is to have been turned down by a bank, so ask the same bank if they do SBA. If not, call around and find one that does.

SBA will not finance pure real estate investments. Usually they require that at least 60% of projected revenue come from an operating business. Some rental income is okay, but keep that in mind when structuring the deal. Also goes to your question of how to own… best to use business entity to own property and you pay rent.