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TOPIC: Down Payment

Down Payment 26 Sep 2009 07:32 #32433

  • jacker5
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A theatre is was looking at is up for sale. The bank is going to be taking it over and the asking price includes the equipment. Iy may go to auction in the future and If it goes to auction, the equipment is not included and since equipment is expensive, they claim this is a great time to move on this opportunity.

However, the bank will probably not be willing to finance 80% of this deal, so a down payment is in the 40% rang.

Isn't that to much!

What are your views on this!
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Re:Down Payment 26 Sep 2009 11:04 #32434

  • BusyBee
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Yes but you may be surprised at how cheap you can get the theater for at auction, which may make it worth it. After all, how many people know enough to want to actually go through with the purchase of the theater? This could turn into a kind of "name your price" kind of deal. The bank will want this off their books.
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Re:Down Payment 26 Sep 2009 12:45 #32436

  • Mike
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40% or 20%: it takes money to buy a theatre and run a theatre.
Michael Hurley
Impresario
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Re:Down Payment 26 Sep 2009 12:51 #32437

  • rodeojack
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As always happens when people post here about recently closed properties they see as possible opportunities, the same old questions come to mind:

Why did it fail?

Why did it close?

What would be different if you had it?
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Re:Down Payment 26 Sep 2009 12:56 #32439

  • lionheart
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I won't comment on whether it is better to buy now or wait for the auction. I will say that it is pretty normal for banks to want much larger down payments on commercial loans, especially when you are not an established business. I would say 40% is probably within the expected range for a conventional loan.
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Re:Down Payment 26 Sep 2009 15:43 #32440

  • rufusjack
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The bank does not have to sell the property at the auction for whatever the highest price if it much lower than what they have it in the books for.

BTW, film equipment is pretty cheap these days. Sound equipment if holding decent value. If the bank was selling just the equipment they would get peanuts for it. Remember that auction in Michigan this past year? Rectifers selling for $40! What kind of equipment is in there now?
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