All Topics / Help Needed! / Commercial loan

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of andrewwestandrewwest
    Participant
    @andrewwest
    Join Date: 2004
    Post Count: 4

    I have identified an opportunity to purchase a bed and breakfast type property. It has a 90K average yearly return. I have been told by my bank that I will need 40% deposite. I have no where near this. Any advice out there…..

    Profile photo of Fast LaneFast Lane
    Member
    @fast-lane
    Join Date: 2004
    Post Count: 527

    Have a chat with some of the many brokers on this forum, they would definately be able to help, especially with the LVR. Try in the finance bit.

    Profile photo of Silver AngleSilver Angle
    Member
    @silver-angle
    Join Date: 2004
    Post Count: 7

    look for another bank!! [cigar]

    i assume this is a net return and the fugures stack up

    60% is not uncommon to purchase a going concern but you can do a lot better. be honest with the other banks and show them your banks proposal and ask them for their best deal. if you really want to deal with your bank, take the bettered deal back to them. if they really want your business, the deal stacks up and you can show the bank you have your act together, they will move to 70%. just watch any other changes they make to the terms if they do agree to change the lending percentage.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Yes it will be harder than the average loan. Banks will only lend on the value of the security and if you are buying a going concern, there may be some ‘goodwill’ built into the price. 40% deposit would seem about right.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of SuccessPlannerSuccessPlanner
    Member
    @successplanner
    Join Date: 2004
    Post Count: 18

    Hi Andrew,

    As Silver said, make sure the figures are correct. We’ve found that often management wages are not taken out (if previously owner-occupied) thus showing much larger profit than was actually achieved.

    What about finding a fellow investor if you can’t get a better loan deal?

    I’m interested in any good deals.

    Kind regards,
    Kirsten

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992

    Hi Andrewwest
    Just went through the process of a commercial loan for a hospitality property, and bought one.
    St George came to the party, LVR up to 60%, and may have gone higher.
    However, I found out too late that if I used a residential property as security for the commercial loan, the LVR is higher. This might help you to get the deal over the line.
    If you want to PM me, I’ll give you the contact person in St George, who was excellent.
    Are you planning to operate the B & B yourself ?
    Have you scrutinised the figures carefully ? Easy to salt the mine. If you can compare the figures of a few B & B’s to guage their costs and to make some comparative formulas for yourself, it helps.
    good luck
    cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
    Email Me | Phone Me

    selling motels in NSW

    Profile photo of siaccisiacci
    Member
    @siacci
    Join Date: 2003
    Post Count: 53

    Maybe you could get them to finance you the deposit amount you need.

    Dave Siacci

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