All Forum Posts by: Chris Cambridge

 The biggest factor in the financing is the cash flow. Get the actual numbers. The down payment is usually 25-35%. You would also want to show reserves after the loan is closed. 

Asking about rates is always premature as loan types really vary. Risk influences rates as well as lender's target returns. 

Not sure how to address all closing as states have different factors. When addressing the loan costs there will be a few items to cover but it depends on lender/loan type. If you want a general answer expect it to be more just to be prepared to price it in. 

Property income does come first.

My only thoughts are get a Preferred equity loan? You will need some cash into the deal though,

 Simple answer get a blanket loan to an entity. Don't know where the properties are and what are the values but in a nutshell you want them out of your name. Programs would vary.

Matthew you can always prorate the current monthly to assume the yearly total that should not be an issue. A six unit is a small deal and you wouldn't have anything like experience hindering your purchase. Just make sure the numbers check out. Good luck.

You may want to work with the actual financials and tenant lists w/lease dates in addition to the rules. Why? You asked a great question Thomas. This will tell how the property is doing yearly and how often tenants are rotating or paying. Please don't let this confuse you, it's called economic occupancy.
You didn't price in a vacancy factor to pull from the top line!!

Stick with the larger exp number between rules and actual exp. 

What we are unable to tell is the age, condition and maintenance needed.

All things being equal it's a diamond in the rough.

George congrats on the Real Deal mention. The post can help encourage other trying to see their way. What's your company or which group do you represent?

Ryan if you are buying this building to take over the practice then that 51% usage is a big factor for lenders. Maybe you should consider initially making that studio part of the practice space to make sure you are above 50%.(what you do after is your own affairs)

If it's an investment based on the numbers it's a 6% cap rate property. Don't know how things are in WA as to whether this is an acceptable cap rate. Regular financing may come in at just over $400K conservatively. $300K would be needed for DP. Is this $42K/yr able to pay a $400K first and return on $300K equity? (Yes you absolutely consider the equity loan)

If the numbers are not making sense to you just buy the practice take the clientele and cash flow.

This loan can be done under the following terms.

Must LEGITIMATELY be worth over $115K each.

Must have 30%+ equity.

Held in an entity (corp or LLC)

Must cashflow (vacant units won't count toward cashflow)

Credit preferred 680

Minimum of 5 properties

Loan request above $150K

I'm not sure about all the hop scotch around this Fannie/Freddie resi stuff. Ottenson has the right approach. These should be held in an entity and seek a commercial loan. As for the equity, if it is currently worth $140K and the mtg is $80K there is equity to cashout but it must really have the value.

Some people reading this may be trying to wrap their heads around the opportunity or what you are trying to do. Posting here one expects advice and general support. I don't know the deal or the potential you may see for upside. I'm in NYC so these cap rates are not unfamiliar.

BUT Ian ..............................

I suggest you familiarize yourself with commercial financing criteria or take an investing course. In a deep breath pass!