underwriting mixed use

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Hi everyone,

I'm pursuing a deal on a mixed-use building in a prime location. Purchase price is 1 million. Seller purchased 3 years ago for $825,000. The first floor is a commercial space housing a pizza shop that grosses $800k annually. If operated correctly, it nets 20% plus a salary for the operator. The second floor is a 4-bedroom apartment that can rent for $2,500-$3,000 a month with $15k in renovations. For restaurants, rent should ideally be under 10% of gross sales, so I believe $5,500 a month is fair.

The seller doesn't have a rent roll or strong financials, and his tax returns are 50% lower than his claims. To address this, we agreed that I would work in the business for six months to verify the financials, which so far align with his POS system.

My main issue is that at 23, I don't have strong financials to get a conventional loan at 75% LTV with a ~7% rate, and the seller's lack of financials complicates bank approval. SBA lenders are confident the deal is lendable, but SBA rates at prime plus 2.5% are high, and I don't want to risk default. I could raise money and bring in partners, but I'd prefer to own 100% of both the business and the real estate. Would love to hear what everyone thinks and am curious to hear everyone's thoughts on the deal - Would be happy to walk anyone interested through it more. Should have it under contract in the next month with a closing Jan 1st. Thanks you guys.