What are the typical requirements for a construction loan of $1,000,000 .This would be to purchase and develop a vacant 16,000 sq.ft. office building into a fine dining restaurant utilizing only 3000sq.ft. to start.What are the credit score requirements what are the cash out of pocket expedctations? Would a business (LLC) of 3 years have a better chance at obtaining financing as opposed to 2 individuals?In short I see a building I want to buy and develope and know the end costs for aquisition build out and supply will be $1million. How do I know if I or my company qualifies to make an offer.
Where is the property located?
Kansas City
680 FICO
10% Down
90% LTV
Commercial loans are different than residential even on the construction side be cautious 90% may be very generous…75% is realistic on the commercial side.
I looked all over last night for commercial funding and 90% is out there all over the place. However, the stips that I described above have to met.
premier
If you can’t get 90% somewhere please forward the loan to me. I would be happy to co-broker it or pay you a referral fee.
Restaurants are not favored properties for investment, that set aside commercial lenders like to you have skin in the game and look to have your investment at least 25% (75% LTV). If you are in the building phase a construction loan might be calculated as 75% ltv including the cost of the land if you own it. A construction loan would generally require that you have permits and plans in place. The proceeds of the loan might be held in escrow for the builder and called at specific way points in completion of the project. Upon receiving the Certificate of Occupancy you would convert the construction loan to a mortgage based on the new appraisal value of the completed property to determine LTV of the loan.