Strip without Anchor by Tom Markel
Purchasing a strip without an anchor tenant puts you in a more difficult position than buying a strip where an anchor tenant is present. The security that comes from a long-term, often well-known occupant is nice to have when making what could be an investment of several million dollars. Doing it without the anchor is more challenging, but it also gives you more freedom when you start to rent out space. Subdividing and knocking down walls is a lot easier to do when you start from scratch. Sometimes the presence of a large anchor store can drive rents up and keep a strip mall half vacant for long periods of time. That could be why the previous owners are selling.
Whenever you make a real estate purchase of any size, you'll first want to examine every possibility for making your investment a financial success and also every possible scenario where something can go wrong. It's not that you expect something to go wrong, but you need to be prepared in the event that it does. The bank or mortgage broker that reviews your request for a commercial mortgage is going to ask lots of "what if" questions. The more answers you have when those questions come up, the more likely you will be to get approved. It's called contingency planning.
Lenders want to lend you money. That's what they do. The one question they have is whether or not you will have the ways and means to pay them back. Credit history is important, but a lot of businesses have poor credit ratings right now after the beating they took in the past few years. Some just barely survived but are ready to begin anew with a real estate investment. If you are one of those and you can present a solid business plan, come up with some up-front capital, and show that you know what you're doing in real estate management, you have a good chance of being approved.
You'll never know until you apply. Get all of your numbers and strategies together and fill out the iBank commercial mortgage application form. We'll take it from there. After shopping you around to the banks and mortgage lenders we have on our list, you should receive multiple offers for a commercial mortgage. Look for differences in the length of the mortgage in number of years, interest rates, and whether or not the lender is a bank, credit union, or private investor. All are important to consider. Choose the one that is best for you and then go forward with your plan. You'll do fine.