Can you use motel leasehold as finance security?

Viewing 4 posts - 1 through 4 (of 4 total)

Mick
Participant
@motelmingle
Join Date: 2010
Post Count: 7
February 8, 2011 - 2:34 am
I am interested in purchasing another motel leasehold and wondering if anyone knows if i can use any equity in my current motel leasehold business which I currently own.
I do not owe anything on my current business and according to industry figures of a motel leasehold ROI = 30% the valuation comes in at $700K.
It would be greatly appreciated if someone could lead me in the right direction.
THANK YOU
Mick | Motel Mingle
http://motelmingle.com.au/
Email Me
Finding Answers! Sharing Ideas! Solving Problems!
Mick C
Participant
@shape
Join Date: 2010
Post Count: 1,099
February 10, 2011 - 12:00 pm
Yes it’s possible because i done a few before, but to be honest it wont be easy….The lender will want to see the following:
1. Good financial for both your existing business and the new one
2. At least 2-3 years and not a “suddenly” increase in profit from the last year only – they will average it out
3. A business plan or exit strategy if required
4. A account letter confirming the financial
5. The books in your financial MUTS be spot on – i seen some book where the business state they only make 50k each year…then suddenly when they want to borrow it goes to 90k
The following will apply:
1. Max LVR on new place would be around 60-65% ( depending on lender)
2. Rate will be commercial rate ( just is expected) and terms
3. 1st mortgage on both places ( some selected lenders will consider 2nd mortgage)
There a few more condition, but that’s the main conditions. But lastly HOW much of the equity are you using VS cash?
You can email me or speak to any another commercial Broker.
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me
Same Banks. Better Rates. Served With a Passion.
thecrest
Participant
@thecrest
Join Date: 2004
Post Count: 992
February 13, 2011 - 12:01 pm
Hi Earlstongardens
Banks may want a valuation of both leases. Costs about $3K each.
Michael is right about the 60-65% LVR currently.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Me
selling motels in NSW
Mick C
Participant
@shape
Join Date: 2010
Post Count: 1,099
February 13, 2011 - 12:17 pm
Yea valuation for this sort of property is such a ROT!! sigh….
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me
Same Banks. Better Rates. Served With a Passion.