No Money For Commercial?
I've found a commercial property that I want to buy. Asking price is 115k, but the problem is I don't have that typical 20% to put down. The best I can come up with is 10%. Any advice on how to come up with the extra 10 grand? I have 8 more months before I can refinance my house, and friends and family don't have the cash - I've already asked.
I'm half tempted to put an offer on the property - perhaps contingent on some kind of financing - and then worry about getting the funds. Is it smart to try and at least get it under contract first, and then make it work?
Have the seller jack up the price 10% and put the down payment down for you. Make suree your loan doesnt have to be sourced or seasoned for this to work.
Also you may want to look at other financing companies as 20% down is twice what the noirmal down payment is.
Good Luck,
Kyle
20% is double what is normal? Maybe I'm out of the loop here. From what I've read 25% down is fairly standard, and when I check the Lender's tab 25 & 30% down is all I can find for commercial properties. Perhaps someone could clarify for me. What is the typical down payment, and more importantly how do commercial interest rates differ from residential? I assume they're slightly higher.
My father-in-law is a major commercial developer down south and has made many millions.
According to him, there is no 'standard' down payment, it's what you can work out with the seller and lender. It's all about relationships.
Two ideas:
Find a hard money lender to help you fill gaps..
-and-
ask the seller if he will owner finance the 20% for 8 months, until you can refinance your house and buy him out.
Tried the owner financing bit and he said no. We'll see what happens. I'm still trying to figure out how to sell the restaurant, and include that in the new lease.
I agree there is no standard down payment but for seasoned investors only. With a track record you can depend what you need and the banks will give it to you. If you are new to the game they require big down payments. If you plan to keep it as a rental they want to make sure it isn't overleveraged. If you plan to flip the property you can likely get it 100% financed if needed.
Good luck.
When you say that this is a commercial property, I 'm assuming that it's a propety other than a residential rental type of property. If that is correct then , I 'm guessing that this small commercial property would be hard to sell and perhaps hard to finance. This may be an opportunity to make an offer with 10% down and the seller carrying the balance of the sales pricet for 2-3 years and which time you would get financing and payoff the outstanding balance..