A retail center can be a solid investment that makes you a huge profit over the course of many years. It can also be an albatross that sinks your financial future. That may seem harsh, but it's a reality that you need to be aware of before you invest in a major commercial property. We're not trying to discourage you from doing it. Just the opposite, here at iBank we want you to be successful. We also want to make sure that you understand the risk and have a solid business plan with back-up plan before you walk into what could be a multi-million dollar project.

 

There are different levels of retail center investments. Car care centers, community centers, convenience stores, factory outlets, neighborhood centers, single-tenant buildings and strip malls all classify as retail centers. If you are applying for a commercial mortgage on any one of them you can expect to hear a series of questions from the bank or lender considering you for approval. Foremost among them will be inquiries about your ability to pay back the loan. Banks don't leave anything to chance, so don't answer with hypothetical situations and projections about economic improvement. Draw up your plan based on what is, not what you think situations will be in the future.

 

If your retail center is the kind that will require tenants to turn a profit, how will you find those tenants? Is there an active group of renters there now, perhaps an anchor store? If you're taking the location on your own, do you have experience running an entire building? Have you already tried leasing and are now making the first move to buy, or are you buying right out of the gate? The banks will want to know the answers to these questions and they'll want to know why. Be prepared when they call to provide clear and concise answers with facts and numbers to back them up.

 

Prepare your business plan and then put yourself in the position of a lender that is reviewing your application. What would you ask of anyone looking for a commercial mortgage on a retail center? Make a list of those questions, answer them for yourself, and then fill out the iBank loan application for a commercial mortgage. You'll get multiple offers and each of those banks and lenders will ask those same questions you asked yourself. Answer each of them and then take the best offer. They'll be plenty to choose from if you followed all of the steps outlined here.