All Forum Posts by: Gaurav Malhotra

Hello

My business parter and I are planning to buy a CRE. We have a loan approved through a credit union at 75%LTV and we each have to bring in 12.5% down payment

My partner wishes to use investor funds (@7% for 2 years) for his down payment portion in lieu of a 2nd mortgage. However, I am not in favor of this for various reasons. 

Q: is there a way that the 2nd lien can be assigned to my partner alone? I. E. If he defaults on his payment, the investor can only go after him and not me..... And not foreclose the property? 

Addifional tips and guidance on this topic is also very welcome. 

Thanks

GM

Hello folks - 

I have recently posted on a couple of other forums for a deal I am working on and trying everything to make sure it happens. 

Scenario: CRE, fully rented, 9.4% cap, 1.1Mn, Greater Seattle Area, Bank loan 75% LTV approved

Issue: My business partner and I were comfortable with paying the 25% down payment but due to the crash of the stock market. The seller agreed to extend a seller note at 2nd lien position and then we agreed to do that as a personal note for me only (not my Partner)

He has backed out earlier today from offering any note due to some issues.

Question: Is there a source that i can tap into for 100K+ funding as a personal note? (no lien on property)

@tom S.

Awesome. Thanks for sharing.

Is there a way to give a note to an investor without giving 2nd lien position? Like a personal or a note on the company? Any sources where i could learn more about this?

(p.s. my partner does not want to take the money and hence he doesn't want to offer a 2nd lien position because i am taking the money)

Hello all - 

I am about to close on a commercial real estate property with a local credit union offering 75% LTV.

The seller has agreed to do a NOTE for 10% but the bank declined it. Seller agreed as I asked him to reduce price or delay sales due to the current stock market that has reduced my net worth significantly.

Since the bank declined, the seller has offered to put the 10% in an escrow, to be transferred to me AFTER the closing with the bank - against a 2nd lien position after the bank.

QUESTION: If i execute this, can the bank call my loan? if yes (as in legally they can)......

Question 2: Do banks care after the closing and call loans if a buyer takes a note and adds a lien in 2nd position after the bank?

Any other guidance?

Thanks

Thank you Scott. I am now looking at a few other options too, including delaying the purchase given the current circumstances.

Thanks for your replies. 

@jasonmedurst: Yes, the building I am buying has 1.11 acres of commercial land and 4200 sqft of building that rents out to 6 offices. Its cash flow positive with a 9.5%Cap. The building is old. and does not have a lot of life available unless i do some improvements over next 10 years (roof, interiors etc etc). My renters are mostly interested in the space for parking hence its interesting to them.

@Scottroelofs: Your assumption is accurate. I plan to raze the current building and make two structures in 5 years - one structure with condos  rental apartments  for old age folks and the other a medico building. The property is zoned for both and has 45 ft height - which allows me 4 floors with a basement due to the slope.

I am confused that why would IRS would compel me to depreciate a building over 39 years when it has only 10 years of life left. 

Hi, 

I am purchasing a commercial real estate (offices). here is the data:

1. Cost: 1.1Mn

2. Originally went into service in 1965 (55 years ago)

3. Assessed land value if 70% and Building is 30% per the county

4. Useful life remaining is max 10 years

Q: when i depreciate the building, will it be for only 10 years (remaining life)...so lets say salvage value is 50K. so I will depreciate 30% of cost = 330K minus 50 K salvage = 280 over a useful life period of 10 years = 28K per year?

or next Q:

will i have to depreciate building value of 330K over 39 years 

or - next Q

Can i use the replacement value from the insurance (400K) and depreciate over 10 years (useful life) or 39 years?

Thanks

@graham fosheim 

Thsnks for your message. Happy to share details. Would it be convenient for you to DM me? 

@Andres aparicio 

Hi,  saw your post and would love to explore how we could help each other grow. I am always looking for good deals. 

If you are open to discussions I can send a DM to explore further. 

Thanks 

Hi and welcome. I am an investor with interests in Greater Seattle Area. Just purchased my first commercial real estate in everett. 

Happy to discuss and explore further.

Thanks

GM

Thanks - will connect with them tomorrow