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Updated almost 3 years ago,
What kind of loan for residential zoned commercial?
Your goals and story: My husband and I want to own real estate as a retirement strategy to replace all income and be able to also do various charitable work while providing for our children.
Type of property: The property is a single family home attached to what used to be a store. The home part was occupied by someone not paying rent in order to maintain residential status. The store part has not been used since about 88. The property is zoned B1 convenience commercial and has proffers stating what types of businesses can be located on the property. The realtor selling the property said the best use would be to tear down the building and put in a gas station, 3 acres property, realtor stated selling as land.
Location of property: NOVA, busy intersection in a huge growth area.
Purpose of financing: We wanted to purchase the property to rent out the house portion and either rent out the store portion or use it ourselves as a store or some other type of income producing facility. The 3 acres we wanted to use for greenhouses, farmer market, partner with local nonprofits, etc.
Type of financing sought: We wanted to get conventional like our other investment properties but were told by our broker we needed a commercial loan due to zoning. Told by a commercial lender the price wasn't high enough because their min is $1M and told to talk to farm credit- farm credit told us because of the zoning we couldn't be financed by them.
Current or prior ownership of real estate: Currently own 4 single family LTR homes plus our primary residence.
Occupancy: All 4 rental properties are occupied by long-term tenants.
Value of property at present and/or your offer price: $350000
After repair value: No clue, selling agent said they were just selling for the land value and not even considering the home- although it is perfectly habitable. He just said the land is more valuable to tear down and build a gas station or dollar store etc with a huge parking lot.
Anticipated or actual appraisal issues: I have no clue because the building is unique and the zoning seems to be causing issues with trying to get financing.
Current rents per month: 0
Fair market rents per month: $1300 for the residence part. Not sure what the store part would be but we would be anticipating additional income of farmer market and other things with the property.
Down payment or equity: We have enough for conventional 20%, would consider refinance of other properties to get all cash.
Source of down payment funds, if applicable: Own funds or consider cash out refi of other properties.
Income Source: W2, we have the other rentals and have never touched the money from them- built up the last 9 years.
Gross monthly income (optional): $
Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: $0
FICO: Good to excellent, flutters between whatever that cutoff amount is.
Credit issues:None
Additional details:The property was already sold. We wanted to purchase it, but couldn't figure out the financing part. I want to know what you would do so I am better equipped in the future because there are additional properties in the area with a similar situation. We lost this property, so I want to be prepared for the next. Should we have various pre-approvals from a multitude of lenders (just worried about the hits to credit that would cause for hard pulls). This was the lowest price property in the area, anything else we're starting to look in the $1M+ mark and I have no clue how to proceed on that. (read: scared at anything higher priced to us- aka more than this property)