Financing a Large Office Complex (Part 2 of 3) - Hydra Debt
Financing a Large Office Complex (Part 2 of 3)

Financing a Large Office Complex (Part 2 of 3)

The step that is next the two of you is to go to the bank and sign off on the deal. Even you should sign personally because the bank already has the property as collateral and they are more interested in the cash flow though you have an LLC. That’s two associated with C’s all that’s lacking is the credit, but this home doesn’t always have any, just what exactly they desire is the credit for the social individuals who purchased it.

Regardless if your FICO of 500 they’ve beenn’t likely to refuse this deal because a partner is had by you with $3,500,000 of equity in the deal, who’s going to signal really.

That is one less obstacle, because the bank is going to view this as a viable deal. Your partner has real equity in the property, so they can use that for his down payment and they don’t care where the money comes fromthey don’t even mind that it comes out of the equity of this property, because it conforms to the laws of their auditors.

Having the vendor to be your lover is the form that is best of financing there is. The seller has a substantial amount of money, has had this business for some time, and has some motivation that is real execute this deal. Therefore, he is a candidate that is prime this sort of arrangement.

The You and Me LLC will choose the property for $6 million. Then, the owner leaves and takes away a chunk that is big of, meaning $3.5 million, of which he contributes half to the You and Me LLC. Then, he takes $1,700,000 out of the deal in cash, but you still own half the home.

Your lover now has a safe, lucrative investment with which he feels very comfortableit’s a reinvestment plan that is built-in. One of his biggest benefits is tax-wisehe now has half the capital gains on which to pay taxes, had he sold the property without reinvesting.

If he took $3.5 million out of this property, he would have to invest that somehow. When people sell something, they may be extremely pleased that they took all of that cash out. But, if it hadn’t occurred to them up to that point, they have to begin to worry about reinvesting issues. This approach gives this owner a chance to reinvest the money in his property that is own that he understands very well.

The new deal has the Him and Me LLC paying $6 million for the property. He must be given by you $1,700,000 and pay off the $2.5 million home loan, so you require $4.2 million to complete the deal.

The $4.2 million you will need to borrow is 70% of the property value that is total. With this figure in mind and your contract in your hand, you and the owner go to the bank together. Hand them your contract showing that the Him and Me Corporation just bought this building for $6 million. You have $1 .7 million for the payment that is down. Therefore, all that’s necessary is a 70% loan to value, because the building holds it self.