This business owner originally purchased a business and its building with private/owner financing. After paying off and selling the business, he wanted to obtain a permanent loan to pay off the rest of the building. The building was pretty strong – a retail property with a single tenant, great location on a major highway… that is, until the pandemic hit. Since Kissimmee’s economy relies heavily on tourism that overflows from the Disney area, businesses were highly effected and commercial building values collapsed.
Even though the business was strong (pawn shop) all of the properties around them had reduced rents so they got a bad appraisal. Despite the lowball appraisal, we were able to close this “undesirable” business type* with relatively little cash down, with a 30-yr fixed rate on a great loan!
(Typically, “cash businesses” such as pawn shops are considered by government agencies and most banks to be undesirable because the cash flow isn’t easily traceable.)