Looking for a Chicago Real Estate Investment Property...Some Difficulties in Getting a Loan

Like I had talked about in my previous post, there are some great deals out there and it's definitely a buyer's market. However, banks have really tightened up their pocket books and won't give you a loan on just any property. They don't care if you're putting 20% down or more, if your building isn't on the "approved" list, then you're not getting a cent. I just experienced a scare with one of my clients who is getting a fantastic deal in a high-rise downtown, but this building has 33% owner occupancy (so clearly an investor building) and is under litigation. Two huge red flags for every lender. Even if the litigation has no affect on the value of the building or units and is clearly an investor building because of the location, lenders will shy away from it almost every time. Most lenders look for a 70% owner occupany rate. We happen to luck out and our mortgage broker found a lender that had this building on their approved list from before the litigation began.

just some food for thought...