Question on RE financing - Posted by Corey ND

Posted by Michael on February 06, 2002 at 19:43:16:


Don’t stop with the first bank that says No, if you do that you will never get anywhere, keep looking! Call every bank in town, if everyone says no then go to a bank out of town, do you see the point I’m trying to make. The money is out there, you just have to find it!

Good luck!

Michael, KY.

Question on RE financing - Posted by Corey ND

Posted by Corey ND on February 06, 2002 at 13:38:01:

OK here is my problem.

Own a vacant commercial property. Owe 40K on a CFD which is due and cannot be renewed. Have a good tenant willing to rent for 4 years 1st year $950 month, 2nd year $1,150 month, 3rd year $1,300 month, 4th year $1,400 month. Taxes are $2,500 year. Need to borrow $25K for renovations. Total loan of $65K. FMV of $100K - 120K after renovations. Most of the renovations are general cosmetic renovations to the property and need to be done any how.

Here is my problem. Pretty good credit (688 fico score). BUT my debt to income is so so.

Bank says can’t do the loan as I don’t have sufficient income to make payments incase of vacanies. I have made all payments on CFD for the last 7 years and have letter stating so.

Any ideas on how to finance this property?

Seems crazy to me. There would be plenty of cash flow and plenty of equity in the property.

SO how does the “little” guy get anywhere?

Update - Posted by Corey ND

Posted by Corey ND on February 07, 2002 at 20:06:39:

I have been in contact with another bank. Things look more hopefull with them. BUT not quite as happy with their terms. I have a letter from the CFD holder stating I have made my payments on time for 9 years!!! I will find out more next week.

Thanks for all of the input.

Re: Question on RE financing - Posted by Craig (IL)

Posted by Craig (IL) on February 07, 2002 at 19:55:29:

You say your credit is good, but your debt/income ratio is “so-so.” You may need to have copies of cancelled checks to show that you can repay. If you have these, you should have no problems getting a loan. You may have to give a little on terms.

Don’t forget brokers. Brokers have more “programs” than a banker and any skilled broker should have no trouble finding what you require. Some bankers, those who aren’t the boss, may have little or no authority. When they say no, it’s a statement about their limitations, not yours. Talk either with the head schmoo at the bank or with a skilled broker to get what you require. Start from the position that you are interviewing loan officer to see if he/she is good enough to help you; it’s not the other way around.

Re: Question on RE financing - Posted by Brent_IL

Posted by Brent_IL on February 06, 2002 at 23:42:13:

Would your good tenant be willing to cosign on the bank loan for the term of their lease in return for something else, like reduced rent, or their landlord’s goodwill? Did you tell your bank that you would be assigning the lease?