Funding Strategy

[Al Turner]

While knowing that commercial property is evaluated on its income making potential, I seem to have missed a step.

I am in the market to purchase a MF in Chicago and finally found a lender offering a loan at 10% of cost. After speaking to the loan officer, he emailed over the paperwork and I began churning out the needed information on all 30+ pages. On several lines, there were question I could not logically answer until after the inspection was done and figures for repairs quoted.

Now to my missed step.

For some reason my mindset was stuck in residential financing mode. Were i would obtain a pre-qual letter, make an offer, submit earnest money with proof of funds letter, and so on...

After stumbling over the questions in the paperwork for two days I called the loan officer and he cleared up a couple things for me:

1. No pre-qual letter will be provided up front
2. A subject property is needed with all the figures filled in for underwriting to analyze the deal (community bank - committee meets once a month)
3. And there is a lengthy lead time (30-60 days) for review before funds will be distributed

My reply to these conditions were:

1. How do I obtain the rent roll and other financials with no pre-qual or proof of financing
2. How can I prove/show the owner I am serious without it

The loan officer mentioned, I would have to be convincing and/or suggest a lease/buy option with the seller.

My question is:

1. Is this typically how this is done?
2. How do I suggest this with no money down, to not lose my deposit if the option is not exercised?
3. What are some alternatives methods I can use to obtain needed information to complete the paperwork?
4. How can I get my hands on an option contract to use?

Thanks in advance....