All Forum Posts by: Kory Miles

@Kory Miles, there are a couple factors here. But the first, as Bjorn noted, talk to some banks and understand what they require of you to qualify for the loan. Different banks will have different requirements since you will be sitting on their balance sheet. Local credit unions and local banks tend to be best for these types of deals, and assuming you already have an established business, you may want to start with the commercial loan officers of your current bank.

From a liability standpoint, I would own the property in one entity and your business in another. This way, if you business gets sued or goes under, the property isn't taken down with it, and vice versa. You then sign a lease between the property and the business and pay yourself rent each month from the business to the property.

As for experience in operating an apartment building, again, this tends to be more flexible with smaller properties and local lenders, but I wouldn't be surprised if they ask for some experience. It really comes down to the lender when you are talking to local banks.

Net worth, again, may be asked for, may not. Often non-recourse loans will require it and local lenders with personal recourse may require the same net worth and liquidity covenants, but there are some that won't have the same requirements.

Evan,

thank you for your response. I have some feelers out with credit unions and bigger banks as well. Surprisingly not many did commercial in my searches.

your absolutely on with the break down of the company being tenancy and paying rent to the entity. This let’s me know my line of thinking is on par, as this is the overall plan.

0 Votes

Cleveland, Ohio

Quote from @Bjorn Ahlblad:

Generally you need to make an offer to get a look at the financials etc. One partner will need net worth equal to loan amount. Some team member will need a track record of experience. You will need 12 months of reserves available. Talk to a lender. Get yourself qualified so you will be taken seriously by bank and seller. Don't forget about seller finance. All the best!

Bjorn, Thank you for actually responding. From my calculations (and current understanding) 600-900k is what is would be needed if financing was the route taken. Does this sound accurate? Trying to get numbers together to best present for potential investors

0 Votes

Cleveland, Ohio

Greetings,

I’m here seeking guidance on a potential deal. The property in question is a commercial property with 9 apartments and one retail space that intend to place my business in. The goal is to own the property in the name is the business and while definitely open to investors and partnership, I’m trying to navigate between the due diligence of the standard bank loan and partnership route, or if the master lease option I’ve been trying to research would work although I templates I haven’t structured one myself. The property has a listing agent, and it seems pretty turnkey, my fear is that without a pre approval I may not be able to be taken seriously, or put together a proposal package for potential partners or investors. I could be in my head about a deal this big as my first. However I’m not afraid to try or ask for help

Some advise I did receive is

Copy of contract or purchase agreement
Last 2 years schedule E or tax returns from the current owner regarding the subject property
Copy of current leases in place for the subject property
but can I ask for that now? It seems I would need something to have someone open their books?

0 Votes

Cleveland, Ohio

I’ve come across some interesting offerings via a local land bank. I am wondering how exactly to approach them. One is a residential that I think could be a good rental property. Seems to be in pretty decent shape from the pictures listed. However the website states “Single Family Home - Property is only available to applications for new construction/infill development of single family homes at this time. We are not currently accepting Lot to Yard, Garden and Green or Commercial Development applications.”

is “new construction” the same as “fix and flip”???

The second property is a commercial property I think could be store front retail at the bottom and have 3-4 units atop. “Commercial - Property is only available to applications for construction of commercial developments at this time. We are not currently accepting Lot to Yard, Garden and Green or Single Family Home applications.”

Does this mean if I am not bringing big box retailers I am unable to secure the property?

Over all I think these have potential to be great investments and this would be my first transaction should it go all the way through. I’m open to any suggestions or tips concerning what I should do or be looking for in going after these properties

2 Votes

All Forum Posts by: Kory Miles

Kory Miles has started 2 posts and replied 4 times.

Post: Commercial Property Purchase

Post: Commercial Property Purchase

Post: Commercial Property Purchase

Post: Land Bank purchase Ohio