Post: #26

^What about a commercial mortgage? What's to prevent a guy from buying say a $10 mil apartment building by owner financing 30%, borrowing the difference and then skip town sipping pina coladas in Brazil for the rest of his life? Yes, I have actually considered this haha.

Post: #27

(01-30-2014 05:16 PM)SpecialEd Wrote:  ^What about a commercial mortgage? What's to prevent a guy from buying say a $10 mil apartment building by owner financing 30%, borrowing the difference and then skip town sipping pina coladas in Brazil for the rest of his life? Yes, I have actually considered this haha.

How would that work? The bank pays the money directly to the seller (well, via a settlement company). Since the buyer put down 30%, then if you skip town, the bank gets a $10mill building for 70% of its price.

Post: #28

anybody got any ideas on books to help start your own property business,buy to let,building your own house etc,starting from the beginning so any help appreciated it,just to add to this discussion,he's right when says it depends on the credit score,my ex worked in a bank in the loans department,and she said that if your credit ratings excellent they will open up champagne bottle when you arrived,poor credit rating you wont even get a coffe,your credit rating is the key,so make sure you don't miss a small credit card payment it could cost you your big idea and loan,5 years down the line.

Post: #29

(01-27-2014 06:55 AM)chibluu Wrote:  You need collateral man. If you default; the bank wants their money and how the hell would you pay them? If you have roughly a million dollars in assets (your house, stocks, bonds, investment properties, business assets) you can risk it all and maybe get the loan but if your business fails you lose everything you own.

If you have a solid proven business plan which I suspect you don't; you could look to venture capitalists or angel funding. Or try to start smaller. If you just have 200k in cash, you're not gonna find anyone crazy enough yo give you a million dollars.

This is generally the proper answer for a new business start-up plan. If you want a million dollar loan, you generally need at least a million dollars in assets as collateral. The purpose of such loans is to provide liquidity to persons of means.

If you have an established business, then banks want evidence of established cash flow sufficient to meet monthly loan payments.

As an analogy, think of a large apartment building that provides both a monthly cash flow and a secured asset in the event of a default.