65% loan

Hi

A question for a bank person or broker

I am trying to find a bank that would take this deal on,
commercial

Property value is $3,200,000.00
bank can get there own valuation done and it will still be $3,200.000.00

Now I can buy this property for $2,000,000.00
It has genuine leases in place paying $240,000.00

Is there any banks out there that would look at the real value of this building and then loan the $2,000,000.00 which still means they have a safety net of $1,200,000.00
Rather than looking at the price I can buy it for.
 
in many cases yes..............rtns of up to 11 and 12 % are not uncommon in the current climate where its hard to get decent finance, that has really hammered the capitalisation rates.

the numbers here on the claimed val at 3.2 would be around 7.5%.

Thats not impossible, but would need a very very very sound tennant on a nice lease and very fresh property with nil specialisation, and getting a valuer to agree would be obviously the main issue

Getting back to the question...............a lender would look at that, even with little skin in the game, but not as a standalone.

ta
rolf
 
Hiya

based on that rent the value is closer to the 2 mill mark if commercial

ta
rolf


It is worth $3.2m even at 7.5%, huge exposure in a top location, excellent tenant

the 11-12% are normaly down side streets and hard to find a tenant or they have a dummy tenant in place and then they move on out over night
 
in many cases yes..............rtns of up to 11 and 12 % are not uncommon in the current climate where its hard to get decent finance, that has really hammered the capitalisation rates.

the numbers here on the claimed val at 3.2 would be around 7.5%.

Thats not impossible, but would need a very very very sound tennant on a nice lease and very fresh property with nil specialisation, and getting a valuer to agree would be obviously the main issue

Getting back to the question...............a lender would look at that, even with little skin in the game, but not as a standalone.

ta
rolf

Wouldn't need to get the valuer to agree, as long as he does not no what I can buy it for then it will value up, the bank could send 5 valuers and they should all be similar as long as they are not aware of the purchase price and I guess as long as the bank does not influence the price in any way then all will be good.

why would they not look at it as a stand alone if it values up at $3.2m and they only loan $2m?
 
Hi

A question for a bank person or broker

I am trying to find a bank that would take this deal on,
commercial

Property value is $3,200,000.00
bank can get there own valuation done and it will still be $3,200.000.00

Now I can buy this property for $2,000,000.00
It has genuine leases in place paying $240,000.00

Is there any banks out there that would look at the real value of this building and then loan the $2,000,000.00 which still means they have a safety net of $1,200,000.00
Rather than looking at the price I can buy it for.
The only question is why is it undervalued at 2 mill or overvalued $3.2 that's a huge difference in value someone must have it wrong..willair..
 
The only question is why is it undervalued at 2 mill or overvalued $3.2 that's a huge difference in value someone must have it wrong..willair..


Deceased estate

No one has it wrong except the seller, I found the deal and negotiated as I do and now i am trying to work out how to buy it without putting up a mill.

I have 4 similar deals sitting on my desk which vary in price, it is really no biggy there sitting there today and tomorrow they will be gone and then I will have a new lot come threw the next day, I can only buy so much but want to buy more that is why I have asked the original question
 
so to clarify... they can't get $3.2 on the open market but a bank valuer reckons its worth it and you say its worth it and the best they can get is your offer of $2m?

if the bank valuer reckons its worth it and will value it at that then there shouldnt be any probs with financing it. i was involved in a similar deal recently
 
so to clarify... they can't get $3.2 on the open market but a bank valuer reckons its worth it and you say its worth it and the best they can get is your offer of $2m?

if the bank valuer reckons its worth it and will value it at that then there shouldnt be any probs with financing it. i was involved in a similar deal recently

No it hasn't hit the open market yet, if it went to the open market $3.2m will be what it should acheive, the people selling it don't have a clue on price and I am not about to tell them either.


Well it doesn't have to be that valuer it can be another valuer from what ever bank, but the thing is what bank will do this deal?????

bank values at $3.2m purchase price is $2m I need $2m from the bank I can't put any of my money in.
Now some people will say thats 100% finance because of the purchase price
but the purchase price really has nothing to do with it. the true value of $3.2m is what it is worth so if the bank takes that into consideration then it is really only approx 65%
SO WHICH BANK WILL DO IT?????????
 
No it hasn't hit the open market yet, if it went to the open market $3.2m will be what it should acheive, the people selling it don't have a clue on price and I am not about to tell them either.
At 7.5% it needs to have a new 10yr+ lease, safe tenant and no upgrading to spend on it.
If any bank would lend on those terms I'd have bought 10 of them last year.

bank values at $3.2m purchase price is $2m I need $2m from the bank I can't put any of my money in.
Now some people will say thats 100% finance because of the purchase price
but the purchase price really has nothing to do with it. the true value of $3.2m is what it is worth so if the bank takes that into consideration then it is really only approx 65%
SO WHICH BANK WILL DO IT?????????
I'd need at least 500k cash and more than that in equity to do that deal.
So either you have friends in high (or higher) places, or ya dreaming.
Given your here asking for cash and 100% finance, me thinks your dreaming.
Not that it has never been done, and that it won't be done again in the future. But at this time, your in lalaland.
Banks have already written down billions in loans to people with no money this fin year, I doubt they're looking for more people with no money whom to lend money.
Of course you could find some equity partners to put up some cash ans give you a % for putting the deal together.
 
At 7.5% it needs to have a new 10yr+ lease, safe tenant and no upgrading to spend on it.
If any bank would lend on those terms I'd have bought 10 of them last year.




I'd need at least 500k cash and more than that in equity to do that deal.
So either you have friends in high (or higher) places, or ya dreaming.
Given your here asking for cash and 100% finance, me thinks your dreaming.
Not that it has never been done, and that it won't be done again in the future. But at this time, your in lalaland.
Banks have already written down billions in loans to people with no money this fin year, I doubt they're looking for more people with no money whom to lend money.
Of course you could find some equity partners to put up some cash ans give you a % for putting the deal together.

How do you know this?? you havn't seen the property and it doesn't need a 10 year lease in place, this property could be vacant and I could service the loan. after a face lift more value will be added to the value and also the rent.


well I am asking for 100% finance, and so what, I am doing something that your not. Who said I don't have cash, equity etc, I can tell you I will own a lot more than you and I aint even thirty yet and I am semi retired:eek::D
 
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Absolutely hilarious.... Which bank will do the deal? Interesting you have so much knowledge on negotiating and valueing commercial properties but have no idea on the criteria used by banks to assess commercial deals...

Why bother settling on the property at all? Just sign and or nominee, and onsell the property prior to settlement. Even if you have to pay stamp duty there's loads of profit there.....
Interesting question as to who is held liable later on if the exeutor is found to have not acted in the best interest of the benificiaries in offloading the property way under market val.
 
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