All Forum Posts by: Mo Sammy

So my city auditor's website is reporting the first home under my name today as "non-owner occupant". Under the owner address, it has my previous address, which is the same address I provided to the second bank, a condo I was renting.

On paper, this means my current primary residence is the condo I was renting and I can work with the second bank as a client who is looking for a primary residence, therefore I could put less down for the 2nd home, and not 20% as I initially thought.

Do I still stand a chance of buying the 2nd home as a primary residence?

Also, do banks share mortgage contracts from their clients, and see if a customer has applied for another mortgage loan?

Thanks Lynn.

I will stay on my current plan, and obtain the second conventional loan as primary residency, since the second bank and first bank are not the same and may not contact each other about the first home owner-occupancy clause.

The second bank has not asked me if I have another home, they are purely making decisions on my credit reports and financials.

Bottom line, I can afford both homes, I just want to avoid paying higher down payment (20%) for second home.

Thank you both.

Lynn: how would I turn the first home to an investment property after living in there after just 1 month? I paid 10% down with conventional loan, do I call the bank back and ask them to turn the property to an investment loan and pay an additional 10%? Or pay a new 20% down? I don't mind doing this, but not sure if this requires a new closing process?

I will read my closing documents later today and see what the exact owner-occupancy clause says.

Thanks again.

I bought a home with 10% down using a conventional loan. It was owner-occupant deal from the bank (not FHA). I have lived in this home for about a month or so now, but found a better property 10 miles away - and I would like to buy it as my primary residence with 10-15% down (not 20%) using conventional loan with a different bank from the first home.

Questions:

1. Is this possible?
2. Will the second bank ask my owner-occupancy clause from first bank or simply focus on my income to debt ration? Does the 2nd bank even care if the first home is owner-occupied or not? Remember, neither loans are FHA.
3. Will the rate and down-payment for 2nd home mortgage be a primary residence rate or investment rate?

Couple of things to note:

1. I'm well within my income to debt ratio to afford both properties. In fact, it's 25% total front-end expense of my monthly income (limit is 38%), back-end is fine.
2. My credit scores are in the 750 range.
3. The first bank hasn't started reporting my first mortgage as a credit line on my credit reports yet. I have a pre-approval from 2nd bank for the 2nd mortgage already.

Thank you, Thank You, Thank You!

Karen, thank you.

What did you mean by "the fact that the tenants are financing their own TI's might mean the developer is in too deep, and a deal can be made on the price.". Can you please elaborate more?

Thanks everyone.

I requested an official offer from the landlord. All previous offers were verbal and guesstimates. Also, I added a 3 years purchase deadline if I accept the offer with my request.

At this time, 18% of the 10k building is available for lease with no letter of intent pending. Another 18% has a pending contract with a national chain fast food restaurant. The remaining 64% (including my office) is in contract.

Next door building (4,400 sft with 2 national tenants) sold earlier this year for $1.34M at full occupancy.

When I get an offer, where is the best place for me start?

Thanks.

What is the Number of employees SBA requires to finance this type of deal? And can any bank or lender provide a SBA financing or just some?

I hear SBA financing takes long time to close and much more documentations, is it worth it over conventional commercial loans?

Thanks again.

I recently signed a lease for my new dental office in a new building. The building is 10,000 sft, and will be completed Spring of 2013.

So far, 85% of the building have been committed to by 4 tenants; my dental office (51% of the building), 3 other national restaurants. The building will be on a very busy artery of the city, with about 60-70,000 vehicles driving through it per day. The 15% of the unoccupied space in the building will likely be leased within a year, because of the very busy location the building is in.

I secured "the right of first refusal" in my lease with the landlord, and feel I should invest in this property within the next couple of years. No price has been agreed at this stage, but the landlord has indicated that the next door building (4,400 sft) which was also recently finished sold for $1,340,000. Suggesting that the building my new office will be in will be at least double that price. I, however, don't agree with that analysis, and would go with what an appraiser thinks of the property. The landlord expects the market CAP rate for the property to be around 7% to 7.5%.

So I discussed this story with my lender, and they told me they would be able to finance this building if I choose to purchase it with 0% down, as long as the seller agrees to sell the building at 85% of the appraised value. In other words, let's say the building is appraised at $2M, I would negotiate it down at 85% of that value ($1.7M), then the bank would finances the $1.7M with 0% down. If seller gets stuck at $1.8M, then I would pickup the $100k difference towards the purchase. Also, the bank would go within their own appraiser in this example, not the seller's.

In any case, the landlord is only building the shell of the building, and all tenants are renovating the interior portions of the space in exchange for a huge discount on the base rent, roughly $4 per sft saving over the first 5 years terms, for my space, the savings is $100k in rent for the first 5 years, plus I negotiated free 5 months of rent when I open my office for business.

The estimated overall income from the building for the first 5 years is about $200k a year, then $250k a year for the next 5 years. All these figures include CAM. Based on my calculation, I think the ROI for this property might be within 8-10 years depending on the final agreed price.

The seller is open to selling the building now while it's still in construction, or down the road when the building is at 100% occupancy (obviously the asking price will be different then). Your thoughts?

Thank you and Happy Thanksgiving!