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Updated 2 months ago, 09/20/2024
DSCR Loans on purchase of dispensary
Hi, I'm exploring the purchase (less than $1million) of a cannabis dispensary in Southern California. The building is currently owned by a reputable cannabis retailer, so the sale would be a sale/lease back. They are offering lease terms with a cap rate in the 12-14% range. My hope is to finance 50% of the purchase. There are a few banks that offer lending, but the terms are terrible. Are there any DSCR lenders that work in this arena? -Thanks, Alex
#4 Mortgage Brokers & Lenders Contributor
- Lender
- Newport Beach, CA
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#4 Mortgage Brokers & Lenders Contributor
- Lender
- Newport Beach, CA
DSCR doesn't touch cannabis, there are some funds who do.
Personally very familiar with the Cannabis industry In SoCal, I grew up there.
Rates are high on cannabis due to there being far and few banks willing to lend on it.
(or even bank for that matter)
Happy to connect!
- Brandon Croucier
- [email protected]
- (310) 480-7355
Hey Alex, Traditional or non-traditional lenders(DSCR) will not touch cannabis. The cost will be more expensive and the LTV will be limited because of the risk if you decide to go the PM option. I can go over some strategies that can work since this is a purchase. Happy to connect!
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#3 Private Lending & Conventional Mortgage Advice Contributor
- Residential and Commercial Broker
Not a DSCR product. This is specialized commercial. Very few lenders do well in the space due to the risks involved (novelty, rules/regulations, etc...). I used to work with a few who'd do cannabis but they have either stopped or closed up shop at this point...
Cheers!
- Nick Belsky
- [email protected]
Quote from @Alex Sinunu:
Hi, I'm exploring the purchase (less than $1million) of a cannabis dispensary in Southern California. The building is currently owned by a reputable cannabis retailer, so the sale would be a sale/lease back. They are offering lease terms with a cap rate in the 12-14% range. My hope is to finance 50% of the purchase. There are a few banks that offer lending, but the terms are terrible. Are there any DSCR lenders that work in this arena? -Thanks, Alex
Hi Alex,
We offer loans to self employed cannabis industry owners for owner occupied residential real estate. I recently closed a primary residence owner occ residence in Malibu, CA, qualifying using 12 mths bus bank statements for a dispensary owner.
Are you trying to purchase the commercial property and dispensary business and inventory?
Craig
BTW, long term 30 year fixed rate in the 7's. Can lend in All legalized states.