First the term of the lease which has 18 years left on it and the purchase price is
1,480,000. It is bringing in 118k/per year and goes up every 5 years. Is
there a way to get 100% / no money out of pocket financing on this deal?
Create an LLC and consider trying to purchase the property this way. An LLC can also be established earlier in the year and you can add other properties that you purchase . I purchase a parcel of land by a quit claim deed so I out that land into my LLCI have a total of 5 new rental properties right now and three of them have, loans and I just put contracts on and two others that I will close on my the end of October. This commercial building loan will be a doable deal. It can be done with a seller carry back of 10% to 20%. I will buy this and consider flipping it. But the Debt Coverage Ratio will still have to work out. Tip100% LTV loans are out there for investment grade (BBB- or better)
credit-rated tenants with a NNN bond lease and a minimum loan amount of
$5mm. Those deals will qualify for loans priced at about 6%, 25 year am,
with DSCR (debt service coverage) minimums of 1.03 after reserves. The deal
you describe doesn’t qualify on size, but if the tenant and lease meet the
credit requirements there could be something close. For small NNN-lease investment-grade credits the best out there is about an
75%-85% LTV with minimum DSCR of 1.1 to 1.15, priced from 6%-7.25% with
20-25 year am and 10-year call. The more favorable terms will apply only to
the better credits. For non-credits, rates will be significantly higher and
LTV’s lower. Using the mid-range terms from above, say 6.5%, 20 year am, the maximum that
could be financed on the deal would be about $1,190,000.
http://www.text-link-ads.com
Tags: apartment building, apartment financing, apartment income producing property, billionaires Investors, calculate the noi, capital investing, commercial financing, commercial hard money, Department of Housing, Trillion $ Deals™, Warren Buffett, Warren BuffettWealth, Wealth, What is a subject-To
