COMMERCIAL/INVESTMENT LOANS FOR EVERY DEAL
In addition to paying CA$H
NOW to buy Seller Financed Notes secured by all types
of property, Cash Now Financial can now provides loans for
the acquisition, development or rehab of any type of
property. Our programs are:
Small Loan Program: This is our in house program for
the acquisition, refinance or minor rehab of
commercial/investment properties or land, in which the
Borrower only needs $50,000 to $250,000. (Full details
at www.cash4you.net ).
2) Flexible Loan
Program: For the larger project; from $250,000 to
$10,000,000 we act as the Borrower's broker to a number
of investors who will loan on virtually any type of
property and will allow Seller seconds up to a combined
loan to value ratio of 95%.
WE ARE NOT YOUR TYPICAL
LENDER! Our President, Ken Gain, has been active in the
Alaska Real Estate Industry since February 1962. During that
time he has been involved in real estate brokerage, property
management, development, syndication, real estate
appraising, and counseling. In addition to surviving over 35
years of self employment in the real estate industry, he has
also been an administrator of government real estate
programs, as Area Representative for the Federal Housing
Administration and as Deputy Executive Director of the
Alaska Housing Finance Corporation. He holds nationally
recognized professional designation in appraisal (MAI), real
estate syndication (SRS), sale and analysis of commercial
investment property (CCIM), and real estate counseling
(CRE). He has personally borrowed over $75,000,000 to
finance Alaska real estate and business projects, so he
understands the Borrower's position!
Following is an
example: Assume a commercial building offered for sale
for $500,000 that is currently experiencing a 50% vacancy
rate and further assume that it will take $100,000 in fix up
cost and leasing commissions to get up to full occupancy.
Comparison with other buildings indicate that if the
building were fully occupied and fixed up it would be worth
$750,000, so it is a good opportunity for the creative
entrepreneur. The problem is that with 50% occupancy the
current income barely covers operating expenses and there is
very little available for debt service. As a result
conventional lenders will only loan $150,000, which means
the buyer/entrepreneur has to come up with $450,000 cash out
Obviously it will very
difficult to make a sale of this property using conventional
financing. But, with our lender they will probably finance
$300,000 with an additional $50,000 to cover an interest
reserve during the first year of the loan. They would allow
the owner to carry back a second deed of trust for $200,000,
which means that the buyer would only need the $100,000
required to fix up the property and get it turned
The terms on such a loan
would probably be interest only for two years with a final
balloon payment at the end of the third year. At that time
the property would be worth $750,000, which means that the
buyer/entrepreneur could refinance it and borrow $550,000 to
payoff the $350,000 loan to our lender and the $200,000
second to the seller.
Example 2: Buyer
wants to buy a tract of vacant land for $100,000.
Unfortunately the seller demands cash and buyer only has
$10,000 down. Because buyer also owns a free and clear
rental home worth $70,000 he is confident he can borrow
$90,000 from the bank so he gives the seller $10,000 earnest
money to secure the land purchase. Unfortunately because the
buyer's credit isn't quite perfect and because the rental
house isn't conventional construction, the bank says "No."
By taking a Deed of Trust against both properties we can
loan the $90,000 needed to save the deal.
Of course creativity does
come at a price. The interest rates on such loans usually
run 12% to 14% and cost 3 to 5 points, plus normal closing
costs. Clearly such a loan would make no sense for the
purchase of a standard performing property, but it can be
quite attractive when there is an opportunity to earn a
large profit by fixing up and turning a property around.
So when you have commercial properties that require
creative solutions, please give us a call!