Question for the learned MB's of this forum; Purchase price of a Comm piece of r/e - $1.6m. In today's lending environment, what is going to be the likely maximum of lend on it?
What type of commercial property is it? Check out the relevant LVR's based on property type in this thread: Commercial Property Education - SS Sticky
Thanks for that Shahin. I crunched the numbers based on the loan amount I'd need, and I'm about $400k short with my part of the funds required, so it's a non-starter for me. It's a mechanical workshop and service station - the servo part is leased to United, and the workshop part was owned and operated by the Vendor for several decades. He has closed the business down and retired, but it was running well into the $1.5mill+ range per year...couldn't sell it, so closed down...bit of a story behind this, but the bottomline is a terrific business has disappeared, and would not take a lot to resurrect it for basically the cost of the machinery and equipment... The purchase price of $1.6m included all the machinery and equipment in the workshop, plus the property itself. If the workshop was rented, it would return $50k per year, plus the $66k per year from United. MY idea was to possibly start up the workshop again, as an add-on to my existing workshop, or lease it to another mechanic to run and have no headaches but a lot less income as a result.
75% isn't that hard for a good security. Being a petrol station is definitely not going to help, that'll reduce the LVR and some lenders will just flat out refuse to lend against them.
