- broke but hopingParticipant@broke-but-hopingJoin Date: 2004Post Count: 1
I own the lease on the Guyra Park Motel it is on the market for $625000.00 and I have the rights to first refusal
my current turnover is $200,000.00per annum and at this time I pay $5737.05 rent per month I also own a property in Cairns & Maryborough Qld.
Properties valued @$385,000 mortgaged @$216,000
I am looking to finance all three properties that I own in an effort to purchase the freehold on this Motel. any help would be apreciated
i am trying to find an invester that will help me finance it on a 20 yr basic rather than 15!
are their any institutions out there that consider 20yr loans for business premisess?Robbie BMember@robbie-bJoin Date: 2004Post Count: 2,493
I think your biggest problem is the amount of deposit you need. Unless you have substantial cash behind you, there is no real point looking for a longer loan term. In answer to your question though, there are lenders who will consider longer than 15 years. The deal has to be pretty strong though.
Mortgage AdviserpfsfinanceMember@pfsfinanceJoin Date: 2004Post Count: 171
Motels are what they call specialised securities and normally you can only get around a 60% LVR and there are not many lenders that will even look at them.
Maybe you could refinance your existing properties and pull out what you can to put towards the freehold, getting whatever loan amount you can and see if the vendor will vendor finance the rest.
Wholesale Mortgage Lender that deals only with brokers.
20 years in Finance IndustryDazzlingMember@dazzlingJoin Date: 2005Post Count: 1,150
If you are paying around $ 68.8 K p.a. in rent for a place up for sale at $ 625 K, that’s a pretty sweet deal – over 11% yield.
I’d seriously look at negotiating the price down hard and have a crack at it yourself.
Of course, having 1ROR, you have the luxurious position of sitting back – doing no work whatsoever – waiting for a chump buyer to come along and negotiate the best deal he can, wait for the Seller to agree, and then when the Seller officially notifies you of the impending sale, exercise your 1ROR and pounce on the deal.
It’s 11% at full asking price, so it’ll be higher than that….
I could think of worse things to pump your money into.
“No point having a cake if you can’t eat it.”Robbie BMember@robbie-bJoin Date: 2004Post Count: 2,493
Dazzling, I don’t think right of refusal works like that unfortunately.
Personally, if I really wanted it, I would offer more than asking price on the condition they allow you to pay whatever amount equates to deposit and costs you need to get the finance deal done over a period of time that you can afford.
Mortgage AdviserIbuycashflowMember@ibuycashflowJoin Date: 2004Post Count: 274
First Right of Refusal differs from lease to lease. Some clauses simply state the property has to be offered to you first.
The more common clause is the property must be offered to you at whatever price someone else is prepared to pay. In other words, it cannot be sold for less than the amount offered to you for.
Check the clause in your lease.
JeffDazzlingMember@dazzlingJoin Date: 2005Post Count: 1,150
I’ve read quite a few…and I can guarantee you that’s exactly how they work.
“No point having a cake if you can’t eat it.”IbuycashflowMember@ibuycashflowJoin Date: 2004Post Count: 274
How many units are there in your motel?
Is there any room for further expansion?
What other facilities are there – restaurant, swimming pool etc?
Can the occupancy rate and/or room rate be improved?
As a rough rule of thumb, Moteliers work on 1/3 of turnover for rent, 1/3 for operating expenses and 1/3 for profit. As you increase your turnover you also increase the rent and hence the capital value of the property.
Have you approached the vendor regarding second mortgage finance?