Many veteran and newbie residential investors are now taking a hard look at commercial real estate investing. Many commercial real estate finance lenders are now making it easier for investors to get loans for smaller commercial deals. Many hard money lenders are also in the picture to help the small investor.
Brokers who have been hurt hard by failing home sales have now shifted their gears, and are now supporting clients with commercial real estate deals. What this means is that financing for commercial deals is becoming more prevalent and easier to get than in the past.
So if you want to get into the commercial real estate then you need to work with a commercial real estate agent. A good agent will help you, just like a residential agent would, to research and find good deals and to educate you on commercial R.E. principles.
An agent that has connections in commercial will be able to bring you new deals. You want this person to be internet savvy. The internet has many resources for investing that you would not be able to find otherwise. The internet is the future of listings for commercial deals, just as it is now for residential deals.
One thing to pay close attention to is requesting an environmental hazards report. These reports will give you information on this property. It will tell you if this property has in the past been associated with hazards clean up. This is critical since a clean up again can cost a lot of money.
You should never attempt to buy commercial real estate without an agent, since you will negotiate deals that you would never be able to do. Getting the right price will help get commercial real estate finance for your deal.
Do worry about their fees. They usually save you enough in the deal to pay for their fees. And remember their deal has already considered location. The right location is one of their key criteria in finding deals for you. Once you find a property you like, you need to make an appraisal. It is more difficult to make an appraisal on these types of properties, since like properties are not always close by.
Getting the best deal will help to get you better financing. Lenders generally offer LTV;s of about 75% to lower their risk. The property rental value is considered when the buyer is qualified for the financing.
Once you find a property, funding can come from a bank, SBA loans, hard money lenders, private commercial lenders, and commercial real estate finance companies. There are also small balance commercial lenders that have less stringent lending policies. You will also find internet sites that present commercial deals for both properties seller and for buyers.
