Found an excellent property, problems financing

[Lon Jansen]

I've found an excellent property, which I believe will turn out to be a good deal if I can acquire it.

It is an apartment complex (40 units) listed at 1.6 million. The seller may consider owner financing a portion of the loan... possibly over 10 years but no more because he wants to get OUT (he is in his 70s).

My credit score is 760. I have another property, commercial building being rented to doctors, with a mortgage on it. No other debt.

I cant put down more than 5% of the entire deal. How can I secure financing from a lender? Where should I start?

[Richard David]

Lon,

I agree with Peter. The average LTV today is around 70-75%. Some lenders do accept a seller second, but most want you to have "skin" in the game, therefore a seller second is frowned upon and not allowed. My suggestion is to secure a first at the maximum LTV possible and bridge the gap with "equity" funding construed as a taxable grant which requires no repayment and then bring the rest of the funds yourself.

Lon, be sure you purchase the property at its "full" appraised value where the seller grosses a finite amount below that figure. This is how you capture the "equity" in the property and use it towards your downpayment. I hope this helps.

Richard David
Bancofino of New York