I am looking at yet another guesthouse. So far for this one DD is stacking up far better than the other projects I've been offered or other places I've looked at. However it will def need a commercial loan with at least 20% deposit + costs which will wipe out all my cash. I would just get over the line at the asking price of $670K.
Now it seems the actual building itself might be only worth say $550K. So I might only be able to borrow 80% of that. Valuation pending. The other amount the owner wants is for all of the furniture and whatever else goes with the business. So possibly $120K. Seems far too much for crap furniture for a hovel of a place so of course I will inventory everything and try and work out a reasonable second hand value for the lot.
But given I wouldn't be able to lend on any of the furniture I imagine any ideas on what I could offer to get the deal done? Payment plans for the furniture after settlement of the property? Or I settle the property and let them keep going for a certain amount of time rent free to me to pay off the furniture? Any one done anything like that? Or could I just offer to buy the building and the business but none of the junk? I'm not sure I'd want fifty year old mattresses and I could probably outfit the lot for much, much cheaper myself and start fresh.
Now it seems the actual building itself might be only worth say $550K. So I might only be able to borrow 80% of that. Valuation pending. The other amount the owner wants is for all of the furniture and whatever else goes with the business. So possibly $120K. Seems far too much for crap furniture for a hovel of a place so of course I will inventory everything and try and work out a reasonable second hand value for the lot.
But given I wouldn't be able to lend on any of the furniture I imagine any ideas on what I could offer to get the deal done? Payment plans for the furniture after settlement of the property? Or I settle the property and let them keep going for a certain amount of time rent free to me to pay off the furniture? Any one done anything like that? Or could I just offer to buy the building and the business but none of the junk? I'm not sure I'd want fifty year old mattresses and I could probably outfit the lot for much, much cheaper myself and start fresh.