Expert: Terrence Cullen - 11/9/2007

Question
I am looking to buy a small strip center located in Illinois.    Here is the information assuming that the sale price is $750,000, I will put down 20% and loan $600,000.

The gross income is $114,340
Tax $39,000
Insurance $2,200
Net Operating Income is $72,140.

Questions:
1) How much should I put for honest monies?
2) What do I need to obtain a loan?

Answer
Where is the property located exactly? The loan programs available in larger MSAs are usually better rates and sometimes higher leverage. Also, who are the tenants? That also affects the reserves.
 The fees for some lending institutions vary. Look to pay anywhere from $2,000 to $15,000 for app fees. If the property is near Chicago, and there aren't any auto motive repair or gas stations I can do 75%Loan to value in the low 6s, whereas most bank loans would be 7.5% and above.

You can call me at work fro a faster response. 703/448-4224. Good Luck.

TC