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  1. #1

    $400,000 Real Estate Loan

    Hi,

    The merchant is 100% owner of a general auto repair shop located in New York which has been operating for 14 years.

    The shop averages $45,000 in deposits per month.

    Credit score is 740.

    The merchant owns a commercial property appraised for $1,200,000 and owes $300,000 on the mortgage.

    The merchant is seeking $400,000 which is 20% of a $2,000,000 commercial property he is looking to purchase to renovate and rent.

    The business shows a loss for 2017.

    Merchant is rate sensitive.

    I’m trying to figure out the best way to structure the financing.

    Your input is appreciated.

    Thank you.

    Michael Sla*****er
    msla*****er@sla*****er.com

  2. #2
    Senior Member Reputation points: 68233
    Join Date
    Dec 2014
    Location
    Quogue, NY
    Posts
    1,108

    Morning Michael.. There are folks on this Blog (Velocity, Apex, Silver Hill) that can do a 'stated' income 'cash out' loan on the existing property- however they may wish to have a say in the disbursement of funds. Likely quickest and easiest way to go is to get 60-65 LTV Hard Money deal- interest only- 10% plus points (your 'cost' will likely be 3) which will give client the DP for the 2M. If the client seeks financing on the 2M- they are likely going to be around 100-200k short due to losses- and that they can't qualify for conventional finance.

    Perhaps seller can hold a note for the remaining 5-10% to get it done. Those same names I mentioned earlier might like the 2M deal- depending upon how much capital will be needed for renovation- and of course appraisal and ARV.

    I always smile when I hear a client showing losses on 540k per year in top line- being rate sensitive. He can't walk into his bank and get it done- that's a certainty- if he could he wouldn't be speaking to you. Accordingly I recommend trying to create realistic expectations, and see if he is realistic. If client believes he can do better than what I described- you know the client will be a time suck.

    As for the initial hard money loan: I represent local investors that like NY Metro Properties/deals like the 1.2M cash out. If they like the deal we know immediately. They tell client to order Title- and if all is clean they close swiftly- many instances no appraisal is needed (just a BPO). Touch base if you would like to discuss further.

    RG 516 510 3855

    rg@businesscapitalconsultants.com

  3. #3
    Member Reputation points: 633
    Join Date
    Feb 2017
    Location
    Fort Washington, PA
    Posts
    37

    Quote Originally Posted by Michael Sla*****er View Post
    Hi,

    The merchant is 100% owner of a general auto repair shop located in New York which has been operating for 14 years.

    The shop averages $45,000 in deposits per month.

    Credit score is 740.

    The merchant owns a commercial property appraised for $1,200,000 and owes $300,000 on the mortgage.

    The merchant is seeking $400,000 which is 20% of a $2,000,000 commercial property he is looking to purchase to renovate and rent.

    The business shows a loss for 2017.

    Merchant is rate sensitive.

    I’m trying to figure out the best way to structure the financing.

    Your input is appreciated.

    Thank you.

    Michael Sla*****er
    msla*****er@sla*****er.com
    Michael- I'd be happy to take a look at this one, give me a call at 215-619-2543.
    Scott Buchholz
    Account Executive
    Velocity Mortgage Capital
    215.619.2543 Direct
    sbuchholz@velocitymortgage.com

  4. #4
    Senior Member Reputation points: 34509 Jstarr's Avatar
    Join Date
    Nov 2014
    Location
    South Florida
    Posts
    838

    if velocity turns you down because of enviromental issues, give me a call - being that its commercial / auto repair, they will most likely want a phase 1 enviromental ( phase one looks at any structure that has been located on that parcel for the past 10-15 years for indicators that there could be contamination ) being that its an auto repair facility that stores cars /oil /antifreeze etc... they will turn it down.

    Hopefully they dont ask for a phase 2 because that could get pricey and if they locate an issue, he will start getting mail and calls from the epa.
    Last edited by Jstarr; 09-27-2018 at 10:44 AM.
    Jerry Starr
    Insource Funding
    433 Plaza Real, Ste 275 Boca Raton, Fl 33432
    P: 800-805-3391 Fx: 561-270-6895
    Jerry@insourcefunding.net | insourcefunding.net

    WHAT WOULD YOU DO " IF " YOU HAD THE CAPITAL

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