Confused And Unsure...
I am interested in a commerical property that leases to a laundromat. They have a 5 year lease and dont seem to be going anywhere soon. Great positive cash flow from what I can see. Im not sure what questions to ask or how to get financing. I spoke to one lender and told me that it sometimes takes months to do a commercial deal. I am wondering if I should get a contract on this place and worry about financing later.
Is there anyway to structure it so that I can get a way out if the financing falls through? what typically happens with commercial financing? is it hard to obtain? Someone help me please, I dont want to be kicking myself in the butt later on if I miss out on this great op.
Thanks in advance.
if you have limited funds to purchase the prop. and need financing to close the deal. put down a contract " will close subject to financing approvail."....kenmax
Thanks Ken.
Now besides getting a copy of the lease... is there anything else that a bank likes to see when making the choice to approve or turn down a commercial property?
Thanks.
You seem very green to investing in commercial? Any particular reason you want to make the leap?
1. Ask the bank what they require for the loan review.
2. Consider hiring someone who has done similar transaction and pick their brain as to how to review such a transaction.
3. The lease defines the cash flow presently. Check there closely. Also consider what happens if the business was to close (death of the owner). Can the space be used for a different type of business.
4. Consider the upkeep and any possible costs of the business were to move. Would there be environmental issues from the use of chemicals?
5. Commercial deals require larger down payments as a rule. Are you prepared to sink in the needed cash? Can you handle 6-12 months of a vacancy between business tenants? Could you afford tenant improvement as an incentive to get the place leased?
6. Are there any restrictions on the use of the property and the hours of operation (imposed by the city)?
John
[addsig]
Oh yeah I'm super green at this commercial stuff. I taking the leap because there is no other way. I feel like the only way for me to learn how to swim here is to thrown myself ini the deep end of the pool.
you might consider selling the lead to an experienced commercial buyer, with the provision that they teach you what they're doing.