Commercial lenders are tightening their requirements

[Rich Weese]

I just had an apartment transaction fall through yesterday due to changes in lenders requirements for buyer. The lender reduce the loan amount by $1 million and required a reserve account set up for 12 months P ITI, $725,000. There was no financing contingency in the transaction so buyer chose to forfeit significant EMD.

I have not verified but was told by another potential buyer that Chase bank is now requiring 18 months reserve for PI TI. This will change a lot of values on properties and ability and interest of buyers to purchase, in my opinion.

[Rich Weese]

@Nick B.

I guess I have multiple motivations for selling one of my buildings. I sold a large building a few years ago and nearly 100 SFR's. I have a good GST set up for grandkids and future generations and it is overfunded. I have been in real estate for over 40 years and I don't really have any other goals to reach.

I am interested in taking some chips off the table with this sale and if the market does suffer a large correction, I might be motivated to reenter the marketplace with my chips.

I purchased this building a few years ago for $6.2 million with 25% down. I have received net cash equal to the down payment and all the equity would be additional profit. The contract that just fell apart was for just under $13 million and I had four offers previously. Two of those agents have already notified me they have parties interested again. I have not quoted a price and will leave it up to the market. That is plenty of profit for me irregardless of the next sales price.