Purchasing small commercial property is not as difficult as many people might think. If you wish to invest in a small commercial property, chances are that the bank will not need income verification and flawless credit record on your part to lend you the money. The commonly accepted definition of small commercial property is any property worth $2 million or less.
Purchasing Small Commercial Property: What You Need To Know
Getting a loan; The property you want to buy decides the loan amount. If you already possess any small commercial property, then you can get the money for cash back.
Small commercial property includes shopping area, offices, bed and breakfast, warehouses, mixed use area, restaurant, bar and mobile home parks. Therefore, you need not stick to office space or shopping plazas.
Small commercial property loans are larger compared to residential property. Since there are fewer investors dabbling in small commercial property, you can have more investment opportunities and lesser competition.
Look under loan lists to find properties you can invest in. You can talk to your previous clients about their property, and make a reasonable offer to them. If any establishment rents their property, you can approach them to see if they would be interested in selling.
To find buyers for your small commercial property, approach businesses that lease office or retail space. They may be interested in buying your property.
Small commercial property transactions need extensive paperwork and documentation. Before extending the loan, the bank or financial institution will see if the property will generate a good cash flow. This is the reason that your credit record is not very important when it comes to loans for small commercial property.
You need to give detailed information to the lender for getting a loan. You have to tell the lender about rents, operating plans and leases before the lender can consider extending a loan to you.
The lenders for the property need not be only banks. You can approach investment banks, residential lenders and credit companies to get loan for purchasing small commercial property.
Most credit lending institutes will do an appraisal of the small commercial property you wish to purchase before extending a loan for it. They will either use a full narrative report that considers the income, cost and profitability, or a 71B. Many financial establishments also use in-house evaluation.
If you wish to invest in small commercial property, there is no time like the present. Low interest rates on loans, more relaxed credit criteria, and the demand for small commercial property is being driven by entrepreneurs, and startups has made purchasing small commercial property as a viable investment option. In addition, the interest rates are less than what you might have to pay for investing in residential properties. All these factors make small commercial property investment attractive to real estate investors as well as small businesses.
Alexander Gordon is a writer for www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at $24.95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.
Business Owners all across the country are joining "The Community of Small Business Owners” to receive and provide strategies, insight, tips, support and more on starting, managing, growing, and selling their businesses. As a member, you will have access to true Millionaire Business Owners who will provide strategies and tips from their real-life experiences.
Article Source: http://EzineArticles.com/?expert=Alexander_Gordon