Commercial properties are buildings or land that are intended to generate profit – either from capital or rental income. When the owner of a commercial property falls behind on payments, the lender can begin foreclosure proceedings.
The commercial foreclosure process isn’t that different than the common process for foreclosed homes. However, lenders are often more reluctant to foreclose on a business. Commercial foreclosures can be costly for the lender and they like to resell the property as soon as possible if a foreclosure has taken place. Foreclosed commercial real estate can be a smart way to get a cheap property.
Understanding the commercial real estate foreclosure process is a great first step, but are you now wondering how to buy an investment property?
Think about what your payments will be each month – you can use a investment property mortgage calculator to help you figure out your costs. Will the property meet your needs? Is it in a great location? Is the price right? Foreclosed commercial property can offer a significant discount over buying a non-foreclosure property.
It isn’t hard to find commercial foreclosure listings. The hardest part will be narrowing down your options based on your criteria. Make sure you are looking at properties that will help you meet your goals and that will work well as an investment for the future. Don’t be afraid to cross them off the list if the commercial real estate foreclosure listings aren’t the right fit! A foreclosure investment property is a long-term commitment, make sure you find exactly what you want before moving to the next phase.
When you find the right foreclosed commercial property for sale, it is time to enter in the negotiation phase. Making an offer on foreclosed commercial properties is very similar to any other real estate offer. Consider who you are negotiating with – a smaller bank might take a lower offer. Banks might also accept less near the end of the quarter – getting the foreclosed property off of their books can be a good incentive for them to make an agreement with you. An investment property for sale will require you to work with a lender to get the financing needed to close the deal.
Getting financing for commercial foreclosures is not as easy as getting a home loan – but it can be done! The first step is using an investment property calculator to determine your costs for the property. Take a look at the current loan rates, are the interest rates low enough? Can you really afford to make a commercial property purchase?
When the bank establishes investment property loans, they look closely at your finances and at the finances of your business. Many lenders offering investment property loans are risk averse, you will have to provide documentation about your finances to the lender. Expect several rounds of questions and paperwork before you get your loan or investment property refinance.
Foreclosure investing can be a smart business move – you get a commercial property that is cheap but will provide you with many benefits.
Buying an investment property can offer a steady stream of income through the rental of buildings or rooms. Commercial properties offer longer-term security as tenants often sign leases for several years at a time. There are also tax benefits for those who own commercial properties.
Buying foreclosure commercial properties is also a great way to expand your current business or find a building that is big enough to accommodate future growth.
You couldn’t resist that income property for sale and now you are the owner of a commercial property. It’s time to make that income property work for you!
First, make sure that you have investment property insurance that will cover your property in the event of any unfortunate accidents. Next, you can take this time to make improvements to the property and lease to tenants… or maybe those improvements were so great you are interested in listing that income property for sale yourself.
Finding a foreclosure commercial property for sale is a great way to start or expand your business and make an income.
