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    5 Replies Latest reply on Jun 24, 2008 11:10 PM by apexfunding

    Buying an office building question(s)....

    luxusmonk Newbie
      Hello everybody,

      We have a Psychiatric practice expanding quite rapidly;we will be running out of room in our current leased office.While looking around we found the perfect office building; perfect location in a wealthy area of town,close to multiple referral sources,no clear competition for miles.It has enough room and offices for continued growth.
      As you might have guessed I am looking to purchase this building : It has an asking price of 790,000,about 3000 sqft and will need very little tenant improvement before it's ready for us.The same space would lease for anywhere between 1.75 to 1.85/sqft.
      I am looking to purchase it through an LLC( with one or potentially 2 partners) and lease it to the Corporation providing the Psychiatric services.We have good cash flow but almost no downpayment.FICOs are in the 670-680 range;
      What would you recommend to finance it?
        • Re: Buying an office building question(s)....
          Bridge Navigator


          Get the down payment! And use coventional financing. This should be your first choice. Find the down payment.


          Depending on the LLC structure and stated purpose, you may be able to qualify for a SBA loan but will still need a down payment.
          • Re: Buying an office building question(s)....
            elitebiz4u Newbie

            Hi my name is Jose from Elite Business Financial.Can you email me your contact info so we can talk.

            Jose Mercado
            • Re: Buying an office building question(s)....
              dublincpa Scout
              I agree with Bridge as far as getting the down payment.

              Do you and the building partners or practice partners have home equity to tap for a down payment?

              Do you (and/or partners) have retirement plan funds with your current practice? You can each borrow against current retirement plansup to 50% of your vested balance, up to $50K. The funds will have to be repaid with interest over five years in equal installments, no balloons. If payments are defaulted on, the upaid balance is treated as a distribution subject to income tax and 10% early distribution penalty for those under age 59 1/2. Not, good, but maybe not the end of the world.

              If you have retirment funds outside the practice, you may have some different opportunities depending on the amounts.

              A local bank may be more willing to consider allowing the practice to borrow money against its cash flow to use as a down payment. The bank just has to know what is going on and will probably want the building loan too. Even if you don't get great terms for 5-7 years, you can refi when the loans come due if the bank is not competitive at the time. If you can get long term fixed rate term loans great, but not likely in this scenario.

              Is the seller willing or in a position to consider carrying back any financing for a period of time?

              My last comment is that if a well structured, reasonable scenario can't be worked out, the cost of "good" opportunity that is forced can be a lot higher than a missed opportunity.

              Good luck. dublincpa at if you have any questions.
              • Re: Buying an office building question(s)....
                Loan_4_You Newbie

                Please email me your contact information. I would like to discuss your options with this scenario.

                • Re: Buying an office building question(s)....
                  apexfunding Newbie

                  If you are still in need of help with business funding, give me a call to discuss future your situation.

                  Best Regards,
                  Steve Do
                  Business Consultant
                  Tel:(832) 483-7485