Owner Carry On Commercial
How does seller financing figure into the purchase of a commercial property?
If a seller will carry 10% or 20%, does that mean that I could get a loan for the balance without any cash, or does the bank require cash from the buyer?
My experience with getting commercial property financing:
- know of banks that do 90% LTV on first mortgage but interest rates are rediculus
- other banks do 80% LTV on first mortgage and allow 10% seller 2nd mortgage but interest rates are also killer
- never found any bank that would allow 100% CLTV financing with seller 2nd mortgage
- best way I have found is to do a 80% standard mortgage with the best interest rate, do 5% of seller assistance for repairs/closing costs/etc at closing (most banks allow this), get remaining 15% from outside the deal such as private lender or loan on another property
perhaps others have better ideas but this worked on the 2 commercial properties I own
I routinely do commercial deals with up to 20% seller seconds. But no matter how much the seller carries the mortgage holder likes to see 5% of your (or your partners) cash in the deal.
Thank you for your replies.
It appears that the standard loan is 80%, and the bank wants to see at least 5% cash.
Are there particular lenders to look for?
In referring to seller assistance on financing, does anyone knows what would be a traditional interest and/or terms trying to convinced seller to do it? Any advise will really help. Thanks