Need help: financing an investment property, have questions
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[{"id": "hotgmey", "text": "How many acres with an SFR? this isn't a commercial financing deal. Loan terms will be based on your credit and personal net worth/ability to repay the investment loan regardless of tenant situation...", "replies": [{"id": "hotku6y", "text": "This is the right answer. If the property can still be used as a residence try your local residential mortgage broker to finance this. It could be as simple as a SFR investment loan. If you're going to hold that long you'll restructure when you develop.", "replies": [{"id": "hotppyx", "text": "Thank you!", "replies": [], "depth": 3}], "depth": 2}, {"id": "hotpmrt", "text": "Thank you!\n\n+\\- 5 acres with entitlements for 51,500 sf of commercial.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hotl29j", "text": "Hi, former appraiser here. \n\n&amp;#x200B;\n\n&gt;But now I recognize the property could feasibly appraise for 2x the asking price, if you valued land and improvements independently.\n\n&amp;#x200B;\n\nThis is incorrect on a couple of key appraisal theory topics. The first is the concept of highest and best use. The second is consistent use theory. It is improper to value the land at one use and the improvements at another use as improvements must contribute to land value to have any value themselves.\n\nNow, if the value of the land is higher than the value of the single family residence, then you have a highest and best use issue. The highest and best use of the land would be to demolish the existing improvements (which do not contribute value to the land) and hold for redevelopment. If, however, similar single family homes are appraising at a higher value than just commercial acreage, then your highest and best use is the single family home. Let me know if that makes sense.\n\nIn short, you can borrow against what the property is worth. But you cannot \"double dip\" by valuing the land and building separately.", "replies": [{"id": "hotq4tp", "text": "Makes perfect sense. Thank you!", "replies": [], "depth": 2}], "depth": 1}, {"id": "hotr3of", "text": "You've already clarified that the residence holds no value to you and that further, you want to maximize its commercial value so....the property is worth whatever you can sell the land for.\n\nI'm not clear on what you're attempting to accomplish here.\n\nIf you can rent the residence out (on a commercially zoned property) for a reasonable amount that is concurrent with your expenses (or your ability to cover the costs while you build equity) in the interim while the market comes to the same conclusions about values that you have, then it's likely worth doing.\n\nWhat the bank (or others who may fund you) believe its worth will be based on what the market says its worth, not conjecture or hyperbole.\n\nIf you have a business that could fit in that structure and land and for you, at twice its market value it made sense, then over enough time, it could be worth doing at that price.  If you can't find a tenant and without one, you can't afford the payments.....it's certainly not, at half the listed price.\n\nDon't overthink this.  If it's a viable deal that you can financially support, then it's worth doing.  If not, it isn't.", "replies": [], "depth": 1}]