Commercial office space is one of the most lucrative real estate investments you can make, if you do it right. There are opportunities right now to get great deals on Business Condos, High Rise Buildings, Medical Buildings, Suburban Stand-Alones, Single-Tenant Buildings, and many more. We'll cover each of these in this section and give you a few tips on how to create a business plan to be approved for a commercial mortgage. Keep in mind when you go through the application and screening process that banks and lenders need to loan you money. That's how they survive. You do not have to settle for less than what you believe are reasonable terms and conditions.
There has never been a better time to "Buy Low" in order to "Sell High" later on. You can purchase office buildings for a fraction of their original cost and collect rents on them while the property value goes up. It's not guaranteed to hit a certain level or escalate indefinitely, a painful lesson that many learned in the recession years, but real estate values around the country have bottomed out recently and really have nowhere to go but up. This is a factor that will be taken under consideration when your loan application is being reviewed.
If it's so simple, how come everyone isn't doing it? You still need the up-front cash or equity for a down payment, a plan to gentrify or remodel if it's an old building, and a reasonable strategy to keep your vacancy rate down to a minimum. The larger the building, the more risk you take. There could be a good reason why the previous owners are selling. If you're buying a brand new development, there's uncertainty involved. What guarantees can you present that your building will fill up and you'll be able to afford to pay the mortgage? That's what the bank wants to know.
You can apply for a commercial mortgage here at iBank by filling out one form and letting us shop your request around to multiple lenders. You'll find as you read through our website that we ask a lot of difficult questions about each type of office building you want to invest in. It's important for you to consider those questions now and incorporate them into your business plan because the banks you'll be asking for financing will be asking those very same questions. Put yourself in their position and be prepared to give solid assurances and evidence of your ability to repay the loan or mortgage you're asking for. A solid business plan should cover all of that.