When to approach the lender?

[Abraham Anderson]

I'll try to be brief, here's the background;

Last week I was shown a 40 unit complex which I'm very interested in; at the moment I'm waiting on the rent rolls, but even if the pro-forma is off by ~10% it still looks like a great deal. The asking price is 1.6M

The current mortgage on the property is with a local credit union, they are interested in keeping the loan & they gave me the lenders information.

In order to finance the down payment, I will be using two sources: I am selling some property next month which will result in about ~130K in cash, and I also own my office building free/clear which is (currently) valued at $150K. I have done about $30K in improvements to my office, so I can definitely get this number raised some.

My question is; When should I approach the lender? If I'm getting a HELOC or HEL I know the process takes a while, and I should probably get this started, but I don't want to jump the gun, especially since I haven't done any negotiations with the seller on the price (and the lender/seller know each other).

[Patsy Waldron]

I would like to add two things to the helpful answers you have already received.

1) It's great that the current lender wants to keep the loan, but don't limit yourself to them. Shop around to see what else is available to you. You may find a better product elsewhere, or you may a stronger negotiating position even if you do end up going with them.

2) About those properties that you are selling to raise capital- will you be paying taxes on them? If so, it may be worth looking into doing a 1031 exchange to avoid the taxes. There are several experts who can guide you through that process on BP- @Dave Foster for example.