Commercial loans for UNDER $100k? Do they exist?

I'm looking for a commercial loan for under $100k. I have a property with a cap rate of 16% and the seller has agreed to carry back a 10% second mortgage. Where can I get financing for this property? I have checked on line and can only find commercial mortgages from $100k on up.
Also if they do exist are the rates on the mortgages higher due to the smaller loan amount?
In Buying Property - Asked by Jacob C. - Dec 1, 2008
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Answer(s)

Juan G.
Broker/Agent
Ontario, CA

Hard money loan form a high net worth individual is usually the easiest route to go. Do some networking and offer a finder fee to some brokers in the area.

Dec 1, 2008
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Joe V.
Owner/Investor
Plymouth, MI

Business Lines of Credit. They are about 45-60 days to financing, and it would be about $10k out of pocket. One of the best parts of it is you can reuse the money over and over again.
Joe Villeneuve
Commercial Finance Specialist
CommercialFinanceConsultants.com
joe@CommercialFinanceConsultants.com
www.CommercialFinanceConsultants.com
734-455-9232

Dec 2, 2008
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Jacob C.
Owner/Investor
Washington, DC

Joe,
That would be great but I don't have a business. Real Estate investing is a part time gig for me and I only have one single family home in my portfolio. I'm trying to grow my RE investment portfolio and I think I'm looking at a great deal but I may just end up financing this thing myself. It seems it's really hard to find a mortgage for such a small amount and I don't want to pay 12% Hard money rates. I don't want to wrap all my cash up in this property either but that is the route I'm looking at taking. I have seen advertisements for business lines of credit all over the web but didn't think I qualified since I don't operate a "business" so to speak.
Thank you for your advice.

Dec 2, 2008
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Patricia H.
Owner/Investor
Apollo, PA

..."That would be great but I don't have a business. Real Estate investing is a part time gig for me and I only have one single family home in my portfolio. I'm trying to grow my RE investment portfolio and I think I'm looking at a great deal but I may just end up financing this thing myself. It seems it's really hard to find a mortgage for such a small amount and I don't want to pay 12% Hard money rates. I don't want to wrap all my cash up in this property either but that is the route I'm looking at taking. I have seen advertisements for business lines of credit all over the web but didn't think I qualified since I don't operate a "business" so to speak."
Jack,
Paying the 12-15% on a private loan is temporary and very well worth the investment.
You are not going to be paying 12-15% for 15 or 30 years like a conventional mortgage.
It will be at most 3-5 yrs, you will be paying maybe $4000 dollars to make $40,000 or more when you flip.
Till you are able to pull out the equity, and pay off the first loan.
You will be buying a valuable property and make your money when you purchase.
Make sure you buy at .60 cents on the $1 and the property is in an area that is stable and steady. Do as much of the labor yourself.
Start an LLC for yourself, these days you need that protection, $700 is about what it will cost you. But it will save you headaches in the future.
Go for it you sound like you have done your homework. Trust your gut.

Dec 3, 2008
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chris w.
Broker/Agent
Southington, CT

WOW! 16%.
Try a personal loan. I was able to secure 50K from Bank of America and I'm no real estate guru! My terms were 9.9% for 8 years. They will try and get you for 15% but everything is negotiable.

Dec 3, 2008
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Chris S.
Broker/Agent
Coeur D Alene, ID
Premium Subscriber

The costs of the commercial loan are going to be prohibitive, depending on the lender you may need a commercial appraisal, environmental site assesment, and ???
I would consider hard money (if you can find a decent rate) or look toward some other form of finance like an equity line on your residence or second on another property.

Jan 5, 2009
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