[skideeppow]

Hi,
Out of my expertise.
I have a guy, owns a building in Rochester NY,
Building #1: He owns this, owes $720k appraisal last year is 1.5mill. looking to take funds out to purchase something else. Looking for 75080 LTV
Building #2: Looking to purchase, $1.444mill, wants to take the money out of bld one and purchase bulding two.

Let me know if anyone wants to take this on.

[First Financial]

Hi,

I Have a lender that can give your client a secured loan. Client has to be over 1 year in business, Less than 5 NSF and no more than one open Cash Advance. Feel free to contact me if interested.

Cheers,

[dpFund]

Hi,
Out of my expertise.
I have a guy, owns a building in Rochester NY,
Building #1: He owns this, owes $720k appraisal last year is 1.5mill. looking to take funds out to purchase something else. Looking for 75080 LTV
Building #2: Looking to purchase, $1.444mill, wants to take the money out of bld one and purchase bulding two.

Let me know if anyone wants to take this on.

Hey Skideeppow,

I thought I would let somebody else jump in but there's not much activity (guess nobody here does RE deals) so here goes:

I am a direct lender for deals very different than this, BUT...I get a lot of RE deals like this done for clients through my relationships in the industry. Here's my feedback:

1.) Not sure of your LTV note above, and assume it is a typo. If we assume a 70% LTV for bld 1 this leaves you about $400k -$450k purchase blg 2. Any lender I work with is going to assume your client would refinance bld 1 to pull the cash out so your client would need to be prepared for that.

2.) Bld 1 will need to cash flow at an acceptable level to warrant the refi. Most lenders will look askance at an owner-occupied bld so you will need to check on that. Location/recent appraisal/owner credit all play into the approval process.

3.) If we assume 70% LTV for the purchase of Bld 2, your client will need to pull $443k from the refi of bld 1 in order to pull off this double transaction. It has been my experience that a large percentage of RE owners overestimate the value of their RE. This deal is very tight as it is, so you will need to confirm the numbers on both buildings. If the owner of blg 2 will take a seller carry-back that can help grease the skids a bit, since things are tight. As in bld 1, you will need to be sure that bld 2 can cash flow to support the mortgage.

4.) 70% LTV is being optimistic for a transaction like this. There are a number of variables that can affect the LTV that lenders are willing to do. If it dips down to 60% or 65% it could negatively affect the rate/term or possibly kill the deal. But if both buildings cash flow nicely, are in a desirable location for the lenders, credit is good, etc. etc. then it is possible to get it done for a reasonable rate.

Hope this helps.

Let me know if you want me to help. Per my note above, although I am a direct lender for business expansion and MCA consolidations, this is NOT something I can finance in-house. I would need to broker it through some lenders I work with on deals like this (I have done a lot of them and have several in process now) and would split any commission 50/50 with you.

Best,

Dan Page
Direct: (303) 938-8280
dan@fundingstrategypartners.com