Wanna Buy A 6 Family Mixed Use - Need Advice!!! - Posted by MP

Posted by Patrick S. Lawson on April 17, 2006 at 09:53:49:

There are a number of stated commercial loan products available. What is your road block to financing?

Wanna Buy A 6 Family Mixed Use - Need Advice!!! - Posted by MP

Posted by MP on April 17, 2006 at 09:26:46:

I want to use the Income/Rent Roll from the proeprty as my ‘adjusted/stated’ income. The property is valued at 10 times the rent roll. I could use some ‘experienced’ people to help me on this. I have a mortgage banker behind me, but, he’s not much help. I want to do this NOW/ASAP/PRONTO. Any guidance would be appreciated, and rewarded.

Re: Wanna Buy A 6 Family Mixed Use - Posted by Eric Woolhiser

Posted by Eric Woolhiser on April 19, 2006 at 08:38:02:

If your lender is not very skilled with commercial loans, either dump him or give him time to study it.
If he won’t study hard, when you are offering him a deal, dump him.

As for using the property’s income, that’s the basis of a commerical loan. The lender is much more interested in the cash flow of the property than your own credit worthiness.

Most loans want to have a debt service ratio of 1.2, that is to say that the net opertating income should exceed the principle and interest payments by 20%.

I have a lender I use a lot in New Hampshire, I send all my commerical clients to him, and he can produce commercial loans in most states.

Let me know if you’d like to hook up with him.

Re: Wanna Buy A 6 Family Mixed Use - Need Advice! - Posted by Chris in FL

Posted by Chris in FL on April 17, 2006 at 14:20:43:

MP, I haven’t done much in commercial/multi-family yet, so I can’t offer a lot, but I have explored it some. I think you are asking “can I use the income from the property I am trying to purchase as stated income”, meaning to count it as income for you or your business when trying to qualify for a bank loan. Any commercial people out there correct me if I am wrong, but I don’t think anybody will let you do that. In fact, my understanding is that they usually want to see your tax returns showing income for 1-2 years before they will count it. Probably the best you can expect is getting them to consider the expected income from the property as a means to help carry the mortgage, though they will probably want to see some successful past experience with commercial property, and/or strong personal debt/income ratios, balance sheet, and credit scores. Also, looking for a standard loan in commercial property, you are generally expected to come out of pocket with a pretty decent down payment. If you are not in a position to buy on your own, but the deal is real good, then consider alternatives. Will owner finance all or part of the price, or can you bring in a partner who brings to the table the things you lack (i.e. - ability to buy). If it is a real bargain, can you wholesale it? Hope that helps some (as I said, I am not strong yet in commercial). Best wishes!