Posted by Tom Caruthers on March 21, 1999 at 17:41:09:
First, congratulations on attempting to put together a deal! But it brings up some questions…
First, will the property appraise for the higher value? Most commercial lenders value income properties using the capitalization approach.
Second, once the seller sells the note, why is he going to give the money to you? I’d think he’d put the cash in his pocket!
Lastly, 80% LTV is a little high for income property. The lender is going to want to see the contract. It won’t take a brain surgeon to see you have no money in the deal; that scares commercial lenders, big time! You may find a hard money lender to make it work, but be sure the debt service is covered, with lots of reserves for vacancy and maintenance.
Granite Bay, CA