Hello,

I am planning to buy both residential and commercial property for
for the first time. Being a self employed and carrying credit card
debt I am not sure what is the best route to take to get loans with
good rates. Appreciate any pointers from the people with experience.

2004: k1 + salary: 35K
2005: k1 + salary: 50k
Credit card debt: 33k
Investment in stocks: 140k
Cash: 18k

I don't know my credit rating, but I presume it is good because (a)
I have always paid my balances on time and (b) I get several offers
of CC with upto 25k+ credit balance. Two months ago I took an offer
for one year 0% and got 16K credit.

I would like to buy residential property for about 200K and for my
office space I am looking to buy for 200K. I want to use my cash
to make down payment of about 5% and want to barrow 95% of the loan.

I have consistant work from a big client for the past 2 and half years
and although the client is not going to give any thing in writing,
but the project will continue for more time. In the short time (year
or two) outlook of continuity looks good. Long time, hard to predict!

1. What is the best route to take to obtain loan with decent rate?
2. Should I buy the commercial propery in the company (S corp) name
or in my own name? What are pros and cons?

Thanks for any info.

Not sure why you have 33k in debt but 140k in stocks, I'd pay that mess
off.

Also am unclear on wanting to *buy* commercial property, or how that'll
get done with only 5% down. Maybe someone else has more history with
this, I thought commercial required 20%.

Can you work out of your house ?

Admin wrote:
Hello,

I am planning to buy both residential and commercial property for
for the first time. Being a self employed and carrying credit card
debt I am not sure what is the best route to take to get loans with
good rates. Appreciate any pointers from the people with experience.

2004: k1 + salary: 35K
2005: k1 + salary: 50k
Credit card debt: 33k
Investment in stocks: 140k
Cash: 18k

I don't know my credit rating, but I presume it is good because (a)
I have always paid my balances on time and (b) I get several offers
of CC with upto 25k+ credit balance. Two months ago I took an offer
for one year 0% and got 16K credit.

I would like to buy residential property for about 200K and for my
office space I am looking to buy for 200K. I want to use my cash
to make down payment of about 5% and want to barrow 95% of the loan.

I have consistant work from a big client for the past 2 and half years
and although the client is not going to give any thing in writing,
but the project will continue for more time. In the short time (year
or two) outlook of continuity looks good. Long time, hard to predict!

1. What is the best route to take to obtain loan with decent rate?
2. Should I buy the commercial propery in the company (S corp) name
or in my own name? What are pros and cons?

Thanks for any info.

writes:

Not sure why you have 33k in debt but 140k in stocks, I'd pay that mess
off.

Me too.

I guess the only time that doesn't seem insane is if the 33k of cc
debt is on some really low introductory financing rate that's less
than what the stocks are consistently yielding, but I'm suspecting
that ain't the case.


--
Todd H.
http://www.toddh.net/

wrote:
Not sure why you have 33k in debt but 140k in stocks, I'd pay that mess
off.

16k - 0%(one year), 7k - 2.9% (life), 5k - 3.9% (life)
and 5k - 4.9%(life)

Also am unclear on wanting to *buy* commercial property, or how that'll
get done with only 5% down. Maybe someone else has more history with
this, I thought commercial required 20%.

I am not aware of the 20% requirement. Thanks for the info! That changes
few things on how much I have to come up upfront.

Can you work out of your house ?

For various, first professional reasons and second personal reasons too,
I need to have separate space.

I have been in my current office for over six years and I feel that
should now try to own my own. I am little overwhelmed with the info
for residential mortage, but for commerial there appears to be not
much info.

Any pointers or info is appreciated.

Thanks

In article , (Todd H.) wrote:

writes:

Not sure why you have 33k in debt but 140k in stocks, I'd pay that mess
off.

Me too.

I guess the only time that doesn't seem insane is if the 33k of cc
debt is on some really low introductory financing rate that's less
than what the stocks are consistently yielding, but I'm suspecting
that ain't the case.

No, it is still insane no matter what the rate. All it takes
is one letter being lost by the post office, and this puppy is
at 24.99% for a month before he even knows what hit him.

I'd also be willing to be that the $140K in stock is tied up
in something, either 401K, IRA, divorce, or it hasn't matured
yet, or it something where he has stock in a private company
that he is waiting to go public. No way he has $140K in cash.

With debt equal to income, there is no way this guy should be
buying anything more than cans of beans and spaghetti-o's at
the surplus store. And what does he need a $200K office for,
when the business only grosses $40K on average? He is on
serious drugs.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ====================

John A. Weeks III wrote:
In article , (Todd H.) wrote:

writes:

Not sure why you have 33k in debt but 140k in stocks, I'd pay that mess
off.
Me too.

I guess the only time that doesn't seem insane is if the 33k of cc
debt is on some really low introductory financing rate that's less
than what the stocks are consistently yielding, but I'm suspecting
that ain't the case.

No, it is still insane no matter what the rate. All it takes
is one letter being lost by the post office, and this puppy is
at 24.99% for a month before he even knows what hit him.

I'd also be willing to be that the $140K in stock is tied up
in something, either 401K, IRA, divorce, or it hasn't matured
yet, or it something where he has stock in a private company
that he is waiting to go public. No way he has $140K in cash.

With debt equal to income, there is no way this guy should be
buying anything more than cans of beans and spaghetti-o's at
the surplus store. And what does he need a $200K office for,
when the business only grosses $40K on average? He is on
serious drugs.

-john-


Hi John,

Thanks for an interesting response. I think you have tried to
stretch your imagination a bit too far. Internet offers far too
many choices for people on drugs to go and post else where.

The fact that I gave numbers and tried to get some info should
have been a hint for anyone to give me the benefit of doubt.
But I guess, some get edgy and jump quickly to conclusions
instead of asking.

If you really have some info that is useful, please do shed
some light on what I can do to build a case for getting a good
rate.

Here is some info on some of the stuff that you have doubted:

* My numbers posted earlier are all correct
* I do have about 140K in stock that if I choose to, I can
liquidate today (of course, I am aware that they could tank
or could sky rocket too, before I have a chance to do
anything)
* My last two year revenues are in the vicinity of 400k, but
that number is useless, as ultimately what I made after my
expenses was far less.

Thanks

1. What is the best route to take to obtain loan with decent rate?

Residential loans are easy, go with a mortgage broker recommended by people
you know. Someone who won't show up to the closing with $2000 in surprise
fees.

Commercial lending is different. You go directly to the bank. Shop around
the smaller community banks, get to know some loan officers. Chamber of
Commerce, Rotary Club, etc, is a good way to meet these people also.

Sometimes the seller will write the loan for you, and you can avoid the bank
altogether. Have a good lawyer lined up if you go that route.

2. Should I buy the commercial propery in the company (S corp) name
or in my own name? What are pros and cons?

Neither. Talk to your lawyer, and a bank that has a trust department, about
holding it in a trust. Keep your real estate separate from your business.
If your business gets into trouble, you need that real estate protected.

Thanks for any info.

Good Luck!

S

Don't worry. Financial planners would have us all with $200K in cash
before we did anything other than take a crap in the morning. That's
far too conservative for almost everyone.


Dimitri

1. What is the best route to take to obtain loan with decent rate?

Residential loans are easy, go with a mortgage broker recommended by people
you know. Someone who won't show up to the closing with $2000 in surprise
fees.

What is your opinion on signing up with an UMB? Do you know if they help
you with commercial lending?

Commercial lending is different. You go directly to the bank. Shop around
the smaller community banks, get to know some loan officers. Chamber of
Commerce, Rotary Club, etc, is a good way to meet these people also.

I am currently in one state and looking for property in a different
state. I am not sure how the above organizations can help me if they
realize that I am moving out of state.

I have been with Wachovia (and its merged banks) for the past 10 year.
Are they good with commercial loans?

Sometimes the seller will write the loan for you, and you can avoid the bank
altogether. Have a good lawyer lined up if you go that route.

Any idea what are typical lawyer costs for a transaction like this?

2. Should I buy the commercial propery in the company (S corp) name
or in my own name? What are pros and cons?

Neither. Talk to your lawyer, and a bank that has a trust department, about
holding it in a trust. Keep your real estate separate from your business.
If your business gets into trouble, you need that real estate protected.

I thought I buy it my name and rent out to my business. Since what I
have is S corp, I thought that I am covered from liability issue.

Doesn't trust setup and maintenance cost a bundle? Given the size of
the property I am looking is trust a worthwhile proposition?


Good Luck!

I need lot of this!

Thanks for some very useful information.

"Admin" wrote in message
...
1. What is the best route to take to obtain loan with decent rate?

Residential loans are easy, go with a mortgage broker recommended by
people you know. Someone who won't show up to the closing with $2000 in
surprise fees.

What is your opinion on signing up with an UMB? Do you know if they help
you with commercial lending?

I've never used one. I always just called up banks and asked for rates. If
they don't have much money to lend, they'll quote higher rates. If they
have money laying around and need to make some loans, they'll quote lower
rates. And rates and terms are sometimes negotiable. You can handle it
yourself.

Commercial lending is different. You go directly to the bank. Shop
around the smaller community banks, get to know some loan officers.
Chamber of Commerce, Rotary Club, etc, is a good way to meet these people
also.

I am currently in one state and looking for property in a different
state. I am not sure how the above organizations can help me if they
realize that I am moving out of state.

Not a big deal, although I've never financed across state lines. You may
end up wanting or needing to work with a bank closer to the property in
commercial lending. Just another question for the loan officers you speak
with.

I have been with Wachovia (and its merged banks) for the past 10 year.
Are they good with commercial loans?

I don't know. I have always gone with small community banks. I've gotten
better rates, and better service. Mega banks prefer mega deals. The guys
in commercial lending at a Mega bank are busy chasing multi million dollar
deals. They'd probably get fired if their boss found out they were spending
time on a $200k deal.

Sometimes the seller will write the loan for you, and you can avoid the
bank altogether. Have a good lawyer lined up if you go that route.

Any idea what are typical lawyer costs for a transaction like this?

No. However, someone has to review the contract, and there are specific
legal issues for real estate and r.e. loans. You want someone who's at
least familiar with these topics. Get a referral or call up some lawyers
and ask what they charge for a contract review, advice, and a closing.

2. Should I buy the commercial propery in the company (S corp) name
or in my own name? What are pros and cons?

Neither. Talk to your lawyer, and a bank that has a trust department,
about holding it in a trust. Keep your real estate separate from your
business. If your business gets into trouble, you need that real estate
protected.

I thought I buy it my name and rent out to my business. Since what I
have is S corp, I thought that I am covered from liability issue.

If you buy it in your name and then cause a car accident and get sued, your
property (and subsequently your business) is at risk. I really don't
remember all the reasons for a trust, and all the protections and
advantages, but call up a bank with a trust department and speak to the
trust officer and they'll explain it all to you.

Doesn't trust setup and maintenance cost a bundle? Given the size of
the property I am looking is trust a worthwhile proposition?

Its not that much. I haven't done a setup in many years so I don't
remember. The annual fee at our bank is $135 I think.


Good Luck!

I need lot of this!

Thanks for some very useful information.

mrsgator88 wrote:
"Admin" wrote in message

I am still not happy with level of my current understanding
of commercial property. If 20% down is required for owning
commercial, then I will have re-evaluate my considerations.

I am continuing to do research and I hope I will have grip
on it before I decide between a sale or a lease. I will look
into trust setup also.

Thanks for your time and responses.