Avatar's Blog
» Why Avatar funds based on the purchase price, not
Posted on 1/23/2006
When was the last time you heard of an investor who purchased a
commercial piece of property for MAI appraised value? Could you name a
handful in the past three to five years? Probably not. Good real estate
investors look for properties selling for less than the appraised value
and snap them up.
The purchase price of properties is called the 'street value' or 'quick sale value'. It is the sum that a property will change for between willing parties today. MAI appraised values assume that the seller has one, two, or even more years to wait for the right buyer to come along and buy the property at top dollar. Life isn't like that.
When you are purchasing a piece of real estate, if you are seeking a non-bank (private lender) loan, count on getting a 65% LTV first lien position loan. Be sure you have 20% to put down on the property yourself - you can gather a group of investors to help you out here, but don't borrow that money. The 15% balance can be a seller carryback.
More about this equation tomorrow....
Posted in Avatar's Loan Criteria
The purchase price of properties is called the 'street value' or 'quick sale value'. It is the sum that a property will change for between willing parties today. MAI appraised values assume that the seller has one, two, or even more years to wait for the right buyer to come along and buy the property at top dollar. Life isn't like that.
When you are purchasing a piece of real estate, if you are seeking a non-bank (private lender) loan, count on getting a 65% LTV first lien position loan. Be sure you have 20% to put down on the property yourself - you can gather a group of investors to help you out here, but don't borrow that money. The 15% balance can be a seller carryback.
More about this equation tomorrow....
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