10 unit building financing issues !

[Richard Moreno]

I am representing a client trying to purchase an off market 10 unit residential building in Boston. There are a few problems : first seller wants a financial statement even before we view the property. But we need to see the property and all of its financials before we even get a term sheet ( pre approval ) for the property.  Keep in mind, the property is very desirable! location ! location! location! 

second problem: Seller does not really have a financial record of the property because he lives there and most of the building is occupied by his family. By the way 3 units are down to studs. My client can cover the $25 % down payment and he has the cash for complete renovation, which is a good thing. The bad part is he does not want to do a hard money loan to acquire the property, and if he uses a bank it most likely will appraise much less than asking price. 

I need ideas of how I can make this deal work using bank financing. 

update before I post to BP. We might be able to view the property this week! Therefore we will at least be able to see condition, bedrooms ,and ask seller for whatever carrying cost he has and other details!

[Jonathan Orr]

@Richard Moreno OUCH! Sounds like unless your buyer is ready to pay 100% cash, you must get the seller to play ball. One option potentially could be that you get the seller to put the property into the LLC with the buyer, then try and get a refi to get cash out of the property. That would provide the seller cash from the property plus the 25% down payment from your buyer, then he rehabs it and can then refi again after the seasoning period (getting the seller out completely). Outside of that I can't think of much more.

Not sure how banks will treat his other properties as collateral, they still will want to do an appraisal of the subject property which puts you back into your first problem. Instead of collateral, I would pull cash from his other properties which then could potentially be a 100% cash deal