All Forum Posts by: Mark Creason

Omari,

Most Realtor associations will not let members share their passwords. Not to say it doesnt happen, but you will most likely have to know a realtor well in order to access data from the MLS.

Mark

Mubasher,

I would suggest finding a competent real estate broker who specializes in leasing property.

Mark

Joel,

Interesting point about the Parent corporate guarantee. I saw a Fresh and Easy recently where the parent was not the owner, but they created an LLC to front the lease. Fresh and Easy's parent corp has an investment grade, but limit liability this way. Financing this property would be more costly and might require a personal guarantee instead of going non-recourse.

Mark

Anne,

Is the buyer a large institutional buyer?

Mark

Melvin,

Where is the property in Chicago?  I grew up on the northwest side.  The church and the day care are not great customers and the grocery could be if a regional or national chain.  Joel is right about parking.  What type of guaranty do you have with the leases.

Mark

William A.

I see loans like this all the time, but are typically on buying several retail centers or office buildings.  Something to consider would be, if you go to sell one of the units, you may have issues with the loan.  I looked at a loan for 15 million last week where the buyer wanted to wrap (3) 5 million dollar properties into one loan.  With the three loans, he would save about 25 bps on the rate, but if he sold, he would have to pay off 125% of the allocation of the loan on the sold property.

Mark

Bill,

Typically a lender is going to look at three years P&L and Balance Sheets for the property.  We typically look for 10% liquidity after close and a net worth equal to the loan amount.  I have seen better pricing for higher quality property and location.

Mark

Kirk,

I would ask the seller to do it.  A shared well agreement should not be that big a deal in a place like Michigan.  You could close the loan this way and potentially dig a second well at a later date to rectify the problem.  If you go hard with your commitment, the seller should not have a problem doing the agreement.

Mark

Jay,

I would suggest that if you are serious about this property, get a quote from a competent lender. I had a client once asking me if we could loan money on a Home Depot. I said yes and asked him to send me the offering memorandum. He sent me an office depot which was being offered at a 4.75% cap rate. Now there is a big difference between a Home Depot and an Office Depot and buying at a 4.75% cap doesnt make much sense. I informed him that we could probably go with a 50% LTV loan. He was surprised, but I think he passed on the deal. If you work with a competent lender, they should be able to give you an idea on the deal upfront before you spend too much time on it.

Mark