Advice on purchasing a commercial property - live in top and lease out bottom
I live in a midsized city and want to purchase a building in the downtown area. The building is undervalued in my opinion. I want to purchase it and make the second floor into my primary residence, and lease out the bottom floor to a business. While the bottom is ready to be leased, the problem is that the second floor is in shell condition, and would need a full rehab, which is why no one has bought it yet.


The quote I have gotten from a contractor puts the total cost of the purchase and renovation in the $350k to $400k range. This is too much to qualify for a FHA 203(k), and I don't have the assets to put down 20-25%. No family members have the funds to give me/lend me, so that's out of the question.


Is it possible to get a small business loan as an individual/sole proprietor? Are there any creative ideas on how I can get financing for this?


A little background information: I'm 30 years old, graduated from college about 2 years ago, and have been working for a company since then. My FICO score is 676. I finished a loan rehabilitation program in January, and my credit jumped from the 570's. The problem is that the original loans are still showing with their full balance and defaulted status, along with an entry for the rehabbed loans. I am disputing the defaulted ones, and the US Dept of Ed says that the defaulted ones will be removed when the credit bureaus investigate, so I should get another bump. These are the only bad marks on my credit.


In the past 6 months, I've gotten a substantial raise, which helped me finish the year making $67k and I should make about $100k or more this coming year. My student loans are paid off now so I am debt free, and my rent is $600 a month.
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