Buying Commercial Property
Posted by admin in Investment on May 27, 2011
If you are considering investing in brick and mortar and are thinking of buying commercial property, there are many points of consideration. Unlike any other investment, putting your money into commercial real estate can be a tough decision to make. To ensure that your investment is profitable, your homework before buying a commercial property needs to be thorough. In this article, I share some important points of consideration regarding buying commercial property. Consider this as a brief guide on how to buy commercial real estate.
Buying Commercial Property – Tips
Buying commercial property is creating a cash flow generating asset and all your efforts need to be directed towards ascertaining its potential value. It’s no secret that these are times of economic recession and the real estate market has taken a beating. However, if you think optimistically, this is a time of opportunity as a piece of real estate, which was beyond your reach in boom time, can be bought at a substantially lower price. Here are the major points of consideration while purchasing commercial property. These are certain pertinent questions that need to be asked that help you assess the profit potential of a real estate investment and make your choice simpler. This is a concise ‘Buying Commercial Property Guide.’
What Kind of Property are You Looking For?
Even before you can start thinking about what kind of commercial property, you need to have a plan about the revenue generating mechanism or business plan that is going to reap cash for you, through this investment. Are you planning to buy rental property or business premises for your company or a shop? If you make up your mind regarding this, you’ll know what type of property to look for. That will simplify your search.
What is Your Budget For Buying Commercial Property?
The next thing to ponder upon after you have decided on what kind of commercial property to buy is to come up with your maximum purchase limit. If you are planning to make the purchase using a mortgage loan, then you need to decide on the maximum down payment you could make. A knowledge of your purchase limit will see to it that you don’t go overboard when negotiating on price and land up in a soup. Start looking for banks that offer commercial property mortgage loans, once you decide which property, you plan to buy. There are many real estate financing options to choose from.
How to Search For Commercial Property?
There are various channels through which you can search for commercial property. Online classifieds and print classifieds are a place to start your search from. Read the rest of this entry »
How to Buy Commercial Property With No Money Down
Posted by admin in Investment on May 25, 2011
About two decades ago, if you did not have 20% of the downpayment for buying a property, not many banks would have entertained your mortgage application. But times and changed and how. Today a downpayment of around 5% is good enough to buy a commercial property. But is a zero downpayment realistic? The answer is yes, but it has its own baggage of certain terms and conditions. Let us try and find some answers which will help us understand how to buy commercial property with no money down.
How to Buy Commercial Real Estate with No Money Down
Seller Financing
Suppose a property is evaluated at $100,000. You sit down with the bank officials to discuss the interest rates, repayment plans, interest rates etc. The bank is willing to finance up to $90,000 of the total amount, leaving you with round about $10,000 as a downpayment. What if you propose a second mortgage of $10,000 at a higher interest rate. If you have a decent credit rating and are willing to pay a little higher interest rate, the bank might finance your downpayment, with you buying the property without paying a single dime as downpayment. The only obstacle one may have is if you have a bad credit score. If you don’t have a good credit score, the lender will not approve of a second mortgage and you will have to arrange the downpayment on your own.
USDA Rural Development Plans
Another way of buying a no money down commercial property is to apply with the USDA rural development plans. It provides you with 100% financing for your home purchases and one does not need to be a first time buyer to qualify. Some of the benefits of mortgages with no money down through USDA rural development is that there is no cap on the purchase limit and you can include the repairs and improvements in your loan. The property that you want to buy should be in a qualifying area as per the USDA rural development guidelines.
Veteran Affairs Loans
Veteran affairs loans allow veterans to buy mortgages with no money down. One has to meet all the requirements as set up by the United States Department of Veteran Affairs. People who are eligible for VA loans are veterans, active duty personnel, National Guard members and some surviving spouses. You need to have documented proofs to apply for a VA loan. Read the rest of this entry »