All Forum Posts by: Moshe H.

Thanks everyone. @Thomas S., I am trying to present a full proposal so that the seller sees what I am trying to do and the numbers as far as what he will make in interest payments, so I want to throw a number out there. I haven't broached seller financing yet but I know they own it outright and don't think they are desperate for the full amount right now. I'm thinking of going with 6% and leave it open to further negotiation.

Hi everyone, I am trying to develop a bid on a commercial mixed use property that I would like owner financing on. I was playing around with the numbers but I'm wondering what the lowest interest rate is that I can offer and still feel like I'm being fair to the seller. I was thinking of 7% but I kind of pulled that out of a hat and I don't want to overpay. The seller is motivated and is an owner/operator not a real estate investor so I don't think they'll push too hard on the rate.

Any ideas? :-)

@Gil Pang I don't think you can get a regular commercial loan for that, it will have to be a short-term construction loan. @David Hamilton to what extent does construction/developing experience play a role in whether a bank will lend to a developer?

Hi @Michele V., I agree with @Andrew Syrios - if you speak with a well-connected broker you might find a commercial lender who goes up to 80% - but keep in mind that closing costs will also cost money. Only commercial lenders will give a mortgage on a 5+ unit and they don't care that you're going to live in the property, to my knowledge.

I have seen a local credit union advertising 90% LTV... sounds too good to be true but it might be worth making some phone calls to your local community banks.

Good luck!

Sounds like he meant NIMBY - Not In My BackYard. I guess those laws would be considered discriminatory today.

If the seller financing is $450/mo. until you pay off the purchase price, without extra interest payments worked in, then it's probably a deal.

@Carmelo Cortes, I don't have access to the MLS but based on Zillow recent sales, even that seems high. This is a very small house at 787 sq. ft. One sold for $110k at 1144 sq. ft., a 350+sqft difference. Allowing for a total rehab where you're selling a house with everything brand new (which may cost more than $35,000...) perhaps it could get to that price.

Even using your number, ($105,000 ARV x 70%) - $35,000 rehab = $38,500 max offer from an investor worth his salt.

Hi @Marc Maser welcome! Sounds like you have a very solid plan. Lots of luck.

@John M. how confident are you on the market value? Have you seen the property? Seems strange that no one would pick it up at auction for 2/3 as-is value.

@Aaron Godfred congratulations. Go on the inspection with the inspector and ask as many questions as you can possibly think of. That's what you're paying him for. Make sure you have your due diligence in line, proof of rent receipts etc. And have an experienced closing attorney. He or she should be able to give you a kind of closing checklist and between the attorney and the agent you should be in good hands. Ask everyone plenty of questions - they understand you're a beginner!