Newbie- Help First Commercial Deal
I am in the NYC metro area. The Broker who sold me a 3 Family in 2000 recently called me to see if I was interested in selling. She sold me the 3Family for 426K and it is now appraising for about 1.4 Million.
After, I told her no. She asked me if I would be interested in a commercial property she had. The basics she emailed are the following : Price 877k; 6 family semi-detached solid brick; Rent roll approx. $57,000 and expenses $13,000. One 2 bdrm to be delivered vacant. Apts have been updated. close to transportation and shopping area.
I never did a commercial deal or analyzed a commerical deal. What questions should I ask ? She suggested that I could use the equity in my current property to help finance a deal, however I read alot about seller financing. Please help ?
Chico
Once you decide if the deal is doable you need to focus on the debt service coverage to determine the financing. Commercial lending is more conservative than residential. You can typically get to 95% CLTV with a seller carry as long as the DSCR is 1.2X.
I would use my equity to finance the down instead of seller financing to put the deal into aggressive financing from the get go. Let me know if you need a good apt program.