Mortgage help needed
- Thread starter larysa002
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Hi Larysa,
Hmmmm...sounds a little suspicious...My guess is that the numbers were bad and they don't want you and the bank to know that they are asking too much. Did you recieve the last years numbers...If so, how do they look?
They should be able to get something from their accountant indicating the buildings income for as long as they've owned it...unless ofcourse they just recently purchased it and don;t have the financials...did you pull the land title to see when they mortgaged it? Ask your Realtor to do a history on the property (this may tell you when they purchased the property and for how much...).
If they are serious about selling an 8-plex, they will NEED the financials. If not for you, then for the next buyer. Explain this to them.
Ultimately, the question is...even if you found a lender, are you comfortable purchasing something like this with only 1 year of financials?
Good luck and keep us posted...
Lucas
QUOTE (larysa002 @ Mar 14 2010, 10:35 PM)
One of our condition was 3 previous financial docs, but they signed back, so they provide only previous year. I know commercial lenders require 3 years. The question now: will it be doable to finance ?
Hmmmm...sounds a little suspicious...My guess is that the numbers were bad and they don't want you and the bank to know that they are asking too much. Did you recieve the last years numbers...If so, how do they look?
They should be able to get something from their accountant indicating the buildings income for as long as they've owned it...unless ofcourse they just recently purchased it and don;t have the financials...did you pull the land title to see when they mortgaged it? Ask your Realtor to do a history on the property (this may tell you when they purchased the property and for how much...).
If they are serious about selling an 8-plex, they will NEED the financials. If not for you, then for the next buyer. Explain this to them.
Ultimately, the question is...even if you found a lender, are you comfortable purchasing something like this with only 1 year of financials?
Good luck and keep us posted...
Lucas
QUOTE (larysa002 @ Mar 14 2010, 10:35 PM)
One of our condition was 3 previous financial docs, but they signed back, so they provide only previous year. I know commercial lenders require 3 years. The question now: will it be doable to finance ?
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QUOTE (larysa002 @ Mar 14 2010, 11:35 PM)
One of our condition was 3 previous financial docs, but they signed back, so they provide only previous year. I know commercial lenders require 3 years. The question now: will it be doable to finance ?
This is part of the deal that's called due diligence. Does it really matter what the 3 previous financials look like, chances are you won't get actual numbers anyway. You're buying it today based on what the numbers look like today and what the future upside is.
I've never dealt with a lender that wanted to see previous financials. I provide lenders with a current pro-forma (provided by vendor) and even a 3 year plan showing what I will do with the property to enhance and guarantee debt servicing capability.
One of our condition was 3 previous financial docs, but they signed back, so they provide only previous year. I know commercial lenders require 3 years. The question now: will it be doable to finance ?
This is part of the deal that's called due diligence. Does it really matter what the 3 previous financials look like, chances are you won't get actual numbers anyway. You're buying it today based on what the numbers look like today and what the future upside is.
I've never dealt with a lender that wanted to see previous financials. I provide lenders with a current pro-forma (provided by vendor) and even a 3 year plan showing what I will do with the property to enhance and guarantee debt servicing capability.
- Joined
- Aug 30, 2007
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- 13,881
QUOTE (larysa002 @ Mar 14 2010, 08:17 PM)
Need help to finance 8-plex asap. Seller will provide last year only financial docs, that I believe will be a problem.
..
This is NOT unusual. Maybe he bought it a year ago .. half vacant .. and filled it up. Thus this may be a good deal .. at the right price !
Deal with it as described below.
Let's eliminate the word "problem" from your vocabulary. Let's call it what it is: a fact.
Yes it rains in Vancouver or is cold in Alberta in the winter. For some it is a problem, but that's just how it is. It is a fact.
Thus: find a mortgage broker or bank that will lend on these (seller supplied and 3rd party) FACTS.
What you need is more facts ! Thus get:
a) an appraisal ($2000 to $5000)
b) an engineering report ($1500 to $3000)
c) a current rent roll, even if hand written (and I have bought at least 3 buildings with hand written rent rolls .. those are teh best deals often ..)
d) an environmental report ($2500 to $4500)
Many banks, but not all, will then lend on this information.
What is the price ? What is the rent roll ? What do the one year financials show ?
Need help to finance 8-plex asap. Seller will provide last year only financial docs, that I believe will be a problem.
..
This is NOT unusual. Maybe he bought it a year ago .. half vacant .. and filled it up. Thus this may be a good deal .. at the right price !
Deal with it as described below.
Let's eliminate the word "problem" from your vocabulary. Let's call it what it is: a fact.
Yes it rains in Vancouver or is cold in Alberta in the winter. For some it is a problem, but that's just how it is. It is a fact.
Thus: find a mortgage broker or bank that will lend on these (seller supplied and 3rd party) FACTS.
What you need is more facts ! Thus get:
a) an appraisal ($2000 to $5000)
b) an engineering report ($1500 to $3000)
c) a current rent roll, even if hand written (and I have bought at least 3 buildings with hand written rent rolls .. those are teh best deals often ..)
d) an environmental report ($2500 to $4500)
Many banks, but not all, will then lend on this information.
What is the price ? What is the rent roll ? What do the one year financials show ?
I felt the same, but taking the risk.
There was a previous private deal that was half through but the buyer walked away.
I contacted the mortgage broker who worked on that deal, so we should be ahead of time a bit,
as CMHC has the file for this property.
Class "c" building in "b"-class neighbourhood.
Gross $62,500
Sale price $428,000.
All dated, but units are pretty, large 1br, with balconies.
Convenient location. If it`s risk, I am willing to overcome, as I would live there.
This is the 5th property we try to buy. No success story yet. Will keep you posted.
There was a previous private deal that was half through but the buyer walked away.
I contacted the mortgage broker who worked on that deal, so we should be ahead of time a bit,
as CMHC has the file for this property.
Class "c" building in "b"-class neighbourhood.
Gross $62,500
Sale price $428,000.
All dated, but units are pretty, large 1br, with balconies.
Convenient location. If it`s risk, I am willing to overcome, as I would live there.
This is the 5th property we try to buy. No success story yet. Will keep you posted.
Following your advice, wise Tomas, thank you.
"c" class in "b" class neighbourhood.
Gross $62,500
We left some deal for the seller, so the selling price $428,000.
Has old steam heater with asbestos, so needs furnace, also new roof, the rest will be upgrade.
Still like it.
And no sense to wait as far as I see.
"c" class in "b" class neighbourhood.
Gross $62,500
We left some deal for the seller, so the selling price $428,000.
Has old steam heater with asbestos, so needs furnace, also new roof, the rest will be upgrade.
Still like it.
And no sense to wait as far as I see.
- Joined
- Aug 30, 2007
- Messages
- 13,881
QUOTE (larysa002 @ Mar 15 2010, 08:47 PM)
Following your advice, wise Tomas, thank you.
"c" class in "b" class neighbourhood.
Gross $62,500
We left some deal for the seller, so the selling price $428,000.
Has old steam heater with asbestos, so needs furnace, also new roof, the rest will be upgrade.
Still like it.
And no sense to wait as far as I see.
big city ? small one ? what province ?
seems like a decent deal with a GRM of 7 .. 10-12 is normal for big cities in W-Canada !
Following your advice, wise Tomas, thank you.
"c" class in "b" class neighbourhood.
Gross $62,500
We left some deal for the seller, so the selling price $428,000.
Has old steam heater with asbestos, so needs furnace, also new roof, the rest will be upgrade.
Still like it.
And no sense to wait as far as I see.
big city ? small one ? what province ?
seems like a decent deal with a GRM of 7 .. 10-12 is normal for big cities in W-Canada !
- Joined
- Aug 30, 2007
- Messages
- 13,881
QUOTE (larysa002 @ Mar 16 2010, 07:38 PM)
End of story.
CMHC apprisal came back much lower than we anticipated.
go back to seller and ask for a price reduction .. don't give up so easily !
CHMC appraisals are USUALLY lower than sales prices .. so this in itself is not a deal killer. Lower by how much ? 5% 10% 15% ? 20% ?
End of story.
CMHC apprisal came back much lower than we anticipated.
go back to seller and ask for a price reduction .. don't give up so easily !
CHMC appraisals are USUALLY lower than sales prices .. so this in itself is not a deal killer. Lower by how much ? 5% 10% 15% ? 20% ?