I have found several lenders willing to do 100% financing over the internet mostly out of Ontario. With 65% coming from traditional banks and remaining from private lender pool. Anyone have experience with this type of financing any input is appreciated. I have found a building with great cash flow and lease in place, even with financing the building 100%
Anyone have experience/or comments, 100% commercial loan financing?
- Thread starter Bradsask
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- Aug 30, 2007
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Oh really ?
I have seen similar offers in the past and had a personal contact with someone working in this space about 8 years ago.
What I garnered at that time was that the interest rate was higher, you had to get several valuations and they used the lowest, the restrictive covenants (eg. debt servicing) were more onerous and they were REALLY REALLY strict about enforcing them, with costs (possibly inflated) of reporting, enforcement and remedy, to you. Remember they don't have a public image to protect either.
Alternatively they were looking for A Class properties, ideally portfolio situations, with high quality occupancies, and proven, professional property managment.
I would be interested to hear if you determine the same thing if you make further inqueries.
I would also look very hard at the property situation and your definition of great cash flow; higher than normal returns - which are historically low - indicates something is going on. This would indicate a cap rate and well above the commercial lending rate, which is usually hard to find on a good property.
At the very least the owner really wants out and it won't be on the market long. The experienced brokers and investors would probably have scooped it quickly, possibly before it ever hit the market.
What I garnered at that time was that the interest rate was higher, you had to get several valuations and they used the lowest, the restrictive covenants (eg. debt servicing) were more onerous and they were REALLY REALLY strict about enforcing them, with costs (possibly inflated) of reporting, enforcement and remedy, to you. Remember they don't have a public image to protect either.
Alternatively they were looking for A Class properties, ideally portfolio situations, with high quality occupancies, and proven, professional property managment.
I would be interested to hear if you determine the same thing if you make further inqueries.
I would also look very hard at the property situation and your definition of great cash flow; higher than normal returns - which are historically low - indicates something is going on. This would indicate a cap rate and well above the commercial lending rate, which is usually hard to find on a good property.
At the very least the owner really wants out and it won't be on the market long. The experienced brokers and investors would probably have scooped it quickly, possibly before it ever hit the market.