All Forum Posts by: Mike B.

One follow up, and forgive my ignorance, but typically w/an interest only loan the buyer would still pay the taxes and insurance, just not the principle correct?

Thanks for the reply Scott.  I was originally thinking of a short term option or lease option, figuring the issue with seller financing is that, without commercial tenants, we'd still be losing considerable $/mo with a mortgage payment whether that be to a bank or direct to the seller.  Hadn't thought of suggesting an interest only loan.  That's a great idea, thank you

To elaborate:  The seller does not have any debt on the building, and has no plans to 1031 with the proceeds.  We need to find a way to structure this deal so that our liabilities are as low as possible until we can lease up the commercial spaces

My sister and I, @Liz Benzschawel, had a conversation this morning with the seller of a mixed use building here in town.  The building has been for sale awhile at a higher price, and now the seller has reduced his price significantly b/c he wants to be done with it.  At the current asking price it's a good deal, with some definite upside potential.  We're interested in pursuing this property, but here's the catch:  Due to the request of the original buyer some months back, the owner terminated the leases of the commercial tenants in the building (then the deal fell thru) and now the only revenue is coming from the residential tenants.  Since the commercial tenants compromised about 2/3 of the revenue for the building, there's no way I can see that we can get traditional financing since the property is underwater w/the commercial spaces sitting empty.  The seller has expressed interest in being open to some creative financing strategies, and we need to get back to him with some ideas within a few days.  If you didn't have the cash to buy outright, how would you approach this situation?

@Dante Terteryan

Michael Blank’s material (book, podcast, website, syndicated deal analyzer) are very good imho

@Dave Foster

Dave is the man

Thanks for this Steve. Being new to the overall process of exchanging properties I'm learning quite a bit just from this thread alone. Those who have responded are bringing tremendous value to the discussion, imo. Whether or not I'll need the full equity I have in the relinquished property (~95k) will depend on the price on the replacement property of course. If it's at the higher end of what we can afford, which would be 1M or better, then I'd need that capital. Strangely, I hadn't thought to use the LOC option until you mentioned it. What I may be able to do is to use a HELOC on our primary in combination with a LOC on the relinquished property to get me (almost) to that 95k mark.

@Mike Meerschaert

Aj Osborne’s book “Growing wealth in self storage” is a good intro into that world if you’re interested

Thank you Dave, the lease option to buy me more time and perform a forward exchange is a good idea, I'll certainly keep that in mind.  I did reach out to the lender we've been working with this morning so I'll see what she says about participating in a 1031.  Thanks again to those who've responded, it's appreciated!

Thank you Bill.  This is enormously helpful.  It took me three times but I think I understand LOL.  I will reach out to the lender we've been working with and inquire about their experience with either process, and will keep the ball moving forward!