My husband and I are interested in purchasing a hotel for 3.8 million. The owner is willing to hold a 30% second mortgage, but he wants a good down payment in order to hold the mortgage. What is the point of having to give a down payment for the second mortgage? Could we not just adjust the % of the mortgage that he will hold? Is there no way to get 100% financing on something like this with a first and second mortgage? Any suggestions would be greatly appreciated!!!

Thanks for your help!

I am not a commercial loan expert. I do know that they are not like normal conforming loans.

Most commercial loans will only do up to about 65% LTV. I am looking at one lender who will only do 55% on hotels/motels. If there are any commercial brokers out there, maybe they can address this a little better.

You may want to post this in the commercial, mobile home Newsgroup

It will be very difficult for you to get 100% financing on a commercial loan amount as high as 3.8 million dollars, however it is not an impossible deal to get done. We should be able to look into your deal further… Many hotels are considered high risk so make sure your credit, employemnt, assets is in line. If the owner is allowing a seller second, take the deal!!.. make it work… I have many commercial lenders that would be willing to take risk on hotels.

Thankyou for all of your advise. In order to get approved for something like this, do I need to personally have enough assets, or can the cashflow from the property work as verification to pay back the loan?

the profit and loss statements from the hotel for the past two years would be needed, however, you assets are only going to make you a stronger candidate and it would be to your advantage if you could disclose them provided you show strength in assets.

Why do some sellers agree to hold a second mortgage on the property, but also want a down payment on the second mortgage? This doesn’t really make sense to me. If I find a lender willing to fund 70% or so and the owner is willing to hold a 30% second, why is there a down payment needed?

Thanks for you time and help!

Since it is a private mortgage second…a dp shows a little more commitment on your part

(1) If I find a lender willing to fund 70% or so and the owner is willing to hold a 30% second, why is there a down payment needed? I’m not sure.


70% + 30% = 100%

that’s why she is asking why would there be a down payment?

Look, I only have nine fingers and seven toes so don’t be making fun Of my math!

I am assuming that the down payment is applied to the second or used towards CC’s. Much like a down on a convential mortgage would be used for.

I see you found the bold button.

Yes! There are all kinds of neat little buttons! 8)

There is no 100% financing in commercial loans. Remember 100% financing in residential is only about 5 yrs now. Commercial has not gotten there yet mostly because of the risk. The roof over your head is less of a risk than business. Hopefully commercial loans one day will get to 100%.
But if you want to do a commercial loan the lenders do require you to invest atleast 10% of your own money.


Thank you everyone for the much needed help!

Good luck! 8)