Cash Out Refi CRE Purchase

[Krishna Shah]

Hi everyone,

I'm new to this. I'm helping my father expand his RE portfolio. He's obviously more experienced since he already owns one CRE property.

I have some questions.

He wants to stick to Bank Financing over private lending. His primary mortgage was sold to a private lender in the early 2000s and he claims he had to give an explanation each time as to why he financed with a private lender with such poor reputation every time his credit was pulled. Despite having an 800+ credit score.

Purchase:

He says banks don't offer 30 year loans for CRE. If that's the case is the best hope a 10/15 year loan with 30 year amortization with balloon payment due? Want to put 40% down.

What requirements do banks look for?


How would they calculate DSCR? Based on Noi/Piti derived from the 30 year amortization? Or from the actual 10/15 year loan?

Cash out refinance:

Hoping to get 70% LTV from current strip mall commercial property. 1 unit owner occupied. 30 year term. Does this sound realistic?

Would doing a cash out refinance first to purchase next property hurt the process in anyway?

What would be some common pitfalls in either transaction?

Thanks everyone.

Cash out Refi property located in Northern NJ, and hypothetical purchase mixed use or multi family apartment building located in Brooklyn most likely