Private Financing for NNN Industrial Building

[Daniel Holbrook]

Hi All,

I had questions about what is realistic for private, secondary financing for commercial real estate.  Thank you in advance for any wisdom you can share!

Situation: I have a verbal contract for two NNN-leased industrial buildings. I do not have 25% down, and the seller is not interested in carrying any. I originally planned on an acquaintance lending most of the down payment, but he recently decided to stop making personal loans.

Questions:  What ideas and options do people have for secondary financing in the commercial world?  Should I keep talking to friends and family?  Are there business loans that can be applied to real estate?  Private RE lenders?

The deal does not really make sense if I have to pay 10% or more for the secondary loan.  Is it realistic to hope for a $50,000 to $100,000 loan at 6% or 8% (20-year am, 2-year term)?  I feel like a lower rate is justified for this deal for some of the following reasons:

- international tenant who has occupied both properties for over 10 years (and NOT energy related)

- NNN terms where they maintain everything except the structure

- Purchased below appraised value

- 800 credit score of borrower 

- short term loan.  I intend to pay it off in 1 or 2 years.

Let me know what you think and your experience. 

Thanks!