To buy this house turns out to be a little more complicated than I might have imagined. First of all, it's expensive -- right now they're asking $695,000, a price that has fallen in $50K chunks from just under $1M since January. (The dramatic descent is nice but it's just barely dropped the price into a level I could consider.) Moreover it's obvious there's a lot of work to be done on the structure -- just walking by you can see there are shingles missing from both the roof and the clapboard siding, and that's before an inspector starts digging around inside. So I know I will need lots of $$ to make this happen.
However, the problem goes beyond the amount of money I need to buy and fix it; I also have to find someone willing to give it to me. Obviously this wouldn't be a problem if I had the cash myself - I could make an offer, negotiate a price, hand over the check, and walk off with the deed, and my dream. But I don't. I'm just a working single mom, with a decent down payment from selling a house in Cambridge, MA, a job that will cover a reasonable mortgage, and an appetite for both a great place to live AND a challenge. But my assumption that all I need is a standard issue mortgage to fund this project -- what I would need if I was buying most any other house I've looked at in the past several months -- turns out to be a bit spurious. Well, in fact, very wrong.
It turns out you can't get a "reasonable" or "standard issue" or any other type of residential mortgage for this house. If it was just apartments (up to four total), you could. But because there is commercial space in the house -- that adorable little artist's studio/shop filled with old books and dust -- that takes up more than 25% of the total square footage (2200 out of 5700), I cannot -- nor can anyone else -- qualify for a residential mortgage, one of those 4.5% interest rate deals that bankers say we'll almost surely never see again. Because this house houses this "big business," it will only qualify for a business, or commercial, loan.
I first get this report from my mortgage guy who I used to see more often than my plumber, and for much better reasons -- he helped me refinance my Cambridge house at least three times for better and better rates. So I trusted his report, and then I heard it again from an insurance guy in Portland, and then finally from a commercial loan broker himself. Apparently there are no creative angles around it.
So, she - a girl not to be daunted in her quest- thinks to herself, why can't I get a commercial loan? Next question to be answered.
The answer is you approach the lenders and say, "Look at what you call a commercial space- it's nothing more than rooms filled with dust. Who would buy dust? It's not commercial. Give me the loan and if you have anyone who needs an apartment I'll dust it for them. Give me the big bucks."
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