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Old 03-21-2021, 07:58 PM
 
430 posts, read 640,150 times
Reputation: 603

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I own a building outright, and I need to borrow to get it in really good shape.

It is zoned for what i want, will be getting confirmation from zoning this week. So assuming it's a go---

I also own an income producing property and that is fully mortgaged, and paying it's way nicely.

Credit rating is high, no cc debt atm.

Am i in a good position to borrow to do the reno to the building? If not, why and what can I do?

Also, when done, it will have a positive cash flow as well.


Thanks.
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Old 03-22-2021, 10:04 AM
 
Location: Raleigh NC
25,118 posts, read 16,078,632 times
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1. you know it will have a positive cash flow how? Tenants already lined up?

2. It is worth $X and the reno costs $Y? How long does reno take?

3. Your other sources of income are what and approx how much?

4. There is a mortgage forum as well.

In the 90's, I was a commercial banker, and that included income-producing property loans. As with individual mortgages, it comes down to 3 things:

Credit (score for an individual, repayment history/capacity over time for a business)
Capacity (ability to repay on the given loan asset)
Collateral (what % loaned, how easy to liquidate)

Not really much you can do about #1 - it is what it is.

Back then, in the case of income producing properties, it was generally 1.3x debt service in cash flow (capacity).

And back then, it was typically 70-75% LTV for collateral/equity.
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Old 03-22-2021, 11:06 AM
 
Location: Columbia, SC
10,894 posts, read 21,852,908 times
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Talk to a lender or 3 and see what they can do for you. Best thing you can do here. I'd suggest a few different ones as they may have different loan options and requirements.
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Old 03-22-2021, 03:24 PM
 
430 posts, read 640,150 times
Reputation: 603
Thank you, I'm waiting for appraisal, etc. I'll be back with pictures if i can pull this off!
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