A Challange to all the Mortgage gurus on this board!
Ok time to put your thinking caps on all you mortgage gurus out there! Here is my situation, catastrophic ankle injury on the job, 7 months no work, no lates on mort or car payment, workers comp settlement of 45k due in about 3 weeks, bankruptcy 2 years ago, Nov 2005 fico 498 , 666 as of yesterday, ( iwish i could raise it or lower it just one point, that # creeps me out!) I want to buy a bed and break fast in small kansas town, relocating from Atl GA and will also be parterning in a small restaurant and bar with my brother in law. The B&B has been totaly redone by owner, invested over 100k in upgrades, thanks to a deployment to Iraq and a nasty divorce wants to dump it, currently not listed with an agent, FSBO was asking 175k no bites in over a year now at 157k. My sis in law knows the family selling and says they want to dump it asap, says an offer of 125-130 would probably fly. This a property that can make its own mortgage payment! You could start collecting money on the day of closing for rentals for the pheasant hunting season, the house is booked @ 100% for three months in advance(PAID) starting sept 15. Would have 20k-25k to put down.Also expect about 30k from sale of current house Whew! My question? How does a guy with out a job but lots of cash go to a bank and get financing on a deal like this? The restaurant bar is 90k for the building and every thing in it. Current sales avg for 3 years is 192k, expenses run about 75k a year. I would have an income from the bar and rest of around 35k plus half of all net profit(20k-25k) I know sounds too good to be true but the guy has health issues and no family to pass it along to. So tell me how crazy I am to do this or even if it is possible! Look forward to your replies.
Re: A Challange to all the Mortgage gurus on this board!
The mortgages for these properties would be considered commercial mortgages which are a slightly different beast than a residential mortgage. While your credit and personal finances are important, lenders focus heavily on the income that the property is able to produce. Generally, the net income from the property must be able to service the debt (The mortgagae paymenst). Depending on the lender, for every dollar spent on the mortgage payments, you will need anywhere from .75 cents to $1.50 worth of net income.
As long as you have the money to come in for a down payment and the income generated is as stated, you should be able to get a loan. Make sure you know what you are getting into with these loans. Rates are generally not as attractive as residential, most commercial loans have a ballon pmt. as well as a lock-out clause which will not allow you to pay your mortgage off early.