Commercial Loan Options

Hi all,

Just want to stay I’ve really enjoyed reading posts on this board, you all seem very bright.

I’ll give you a quick bio of myself before I ask my question. I’m 23yrs old I have a degree in Mechanical engineering and have decided to enroll back in school and complete a business degree with a dual concentration in accounting and marketing and will be approx. 26yrs old when I finish.

For the last year I’ve been completely obsessed with real estate (mostly commercial multifamily) and read non-stop trying to absorb all the info I can. However, I have a dilemma, after I’m finished with school I want to jump right into real estate investing because I won’t have anything holding me back (i.e. family, kids etc) except the fact that I’ll be young and without a large down payment for a property.

Now the question, is there anyway for someone in my position to find financing (without having to partner with someone) for commercial properties in the area of $1,000,000-$1,200,000?

If so, what are they?

I’m a retired Mechanical Design Engineer who worked for Xerox for most of my years in this trade. I designed mechanisms and systems for commercial laser printers.

I wished I had read Marshall Brain’s presentation he gave to a group of 200 at Duke University when I was 23 ::

If you have a ME degree, you might appreciate Marshall Brains accomplishments.
Good luck to you Dan :slight_smile:


That is very inspiring.

About the financing though, is there anyways for me to obtain this kind of financing? I know it’s been done before so I know there are ways of doing this in my position, but I need suggestions.


i have a large group of people i work with and i can give you some names and the like of some that would work with you and do some creative things to get you in the bussiness if you want, i will see what i can do ;D

I really do appreciate the offer, however, I’m not quite ready to begin investing as I’m still completing my second university degree. Right now I’m looking for solutions for obtaining the financing needed for this venture in order to further my research in real estate.

Alot of people tell me that it will be impossible to do so because of my young age, inexperience in commercial real estate, and limited liquid assets, however I refuse to accept that. It has been done before (Scott Scheel did it at 25yrs old while in debt through owner financing)

With that being said, if you could provide me with the advice or solutions on how to obtain financing for someone in my position that would greatly appreciated.

Thank you

I would caution you against starting your investing career without any money. Let’s assume you can get a 100% LTV loan (at a 100% it probably won’t cash flow but that is another topic). What are you going to do about closing costs? Closing costs & the appraisal usually run about 5% of the loan amount.

What about reserves? Most lenders require that you have reserves set aside for maintenance, etc.

What about legal, accounting, property management expenses? When you start looking at $1 mil dollar properties, you will definitely want legal & accounting help. You might be able to live without the property management company if you have.

What I would suggest, whereever you are located look for a duplex or 4 family. You live in one of the units and rent the others out. Since it is owner occupied your interests rates & insurance rates should be a little bit lower. You will also learn the “joys” of property management. This is a good skill to learn so when you’re interviewing property management companies, you know what you’re talking about. Then after you graduate (hopefully you’ve saved a little bit of money), you can do a 1031 exchange and get a larger apartment complex. Once you get a job and you have more cash, then you will be ready for the bigger projects.

I hope that helps.

Patti Porter

well I wouldn’t say I will have no money. By the time I graduate I’ll have about $50,000 saved and will soon be inheriting a home worth about $100,000 (grandmother is moving in with my parents). So I’ll have some but not a whole lot.

What % do commercial lenders usually require as a down payment?

Also, could you give me an estimate of liquid assets one would need to acquire a property worth about $1,000,000?

The % down is dependent on the property type. With apartments and some NNN you can get 10% down plus closing costs.

Liquid assets needed is also dependent on the property type & age of the property, but 1% - 5% would be good.

Here is some help. The size loan you are speaking of $1-1.2MM is out of your range. You have more working against you than for you at this age. Your best bet would be to sell the house, take your profit + $50K and by a small multi-family parcel and try to increase the density on the property. Then sell it to a bigger fish, take your profit and do it all over again. Without experience in the development side of things you will need a large down payment with additional liquidity to back up the loan or you will need to have the capacity to repay the loan from you other cash flow (regular 9 to 5). There is nothing wrong with partnering up with someone that has what you lack (money). No offense.


None taken. I think that’s the route I’m going to take, start with smaller properties. I will also try flipping SFH at the start in order to work up some capital for future plans. I feel that having a real estate license and flipping houses would be a very beneficial situation especially in a sense that I won’t have to pay someone else commissions and will hopefully be able to find a lot of deals.