Does quick closing make sense?

General Real Estate Investing
1

I am working on a deal which is the commerical office condo with following numbers:

  1. Price: 300,000
  2. Cap Rate: 9%
  3. Good tenant with 21/2 left on the lease.

I like the deal. Ideally I would like to put the 20% down and mortgage the rest.

Seller has not put the property on the market yet. I am familiar with the area and think that it is fairly good deal. Only issue is that seller insists on quick closing (less than a month). I do not think I will be able to get the mortgage by then.

I have some home equity. If I use that I will be ok until the mortgage comes. I will make sure that I have following contingency in the sales contract.

  1. Inspection.
  2. Appraisal
  3. NO Financial contingency.

Can you guys please advice me if all this make sense. Am I missing any due diligence by not getting the loan and if I am how I make up for that.

2

One way or another there is a “financial contingency”.

The owner does not want to take their property off the market long. If you use a commercial loan or a residential cash out refi your going to need a letter from a lender stating that you are infact qualified to make the purchase.

If the deal is clean then you should have no problem closing in a month on a commercial loan.

3

Deal is very clean. I am not doing residentail cash out refi. I was planning on using the home equity loan I already have approved.

4

In that case a 30 day requirement is not unreasonalble.