Buying Commercial Property With no Money Down ...

Nowadays, buying commercial real estate is a daunting task because lending institutions have tightened the criteria for commercial business loans which includes commercial property investment. The days of zero downpayment 100% financing for investment property is now over. But if you?re thinking of buying commercial property with no money down, we will expose some real estate investments strategies than can make that happen. Using some of these investment property advice, the seller may agree to give you the the okay to use some of the creative seller financing ideas listed below.

First let say, you need not be intimidated using these real estate investing ideas and it is time you imagine yourself successful. If you believe these techniques, the seller may just go along with your enthusiasm. Buying commercial real estate with zero downpayment is very common in this economic malaise with abundance of commercial space and low commercial property purchase prices.

The amount of money obtained to buy commercial real estate will depend on the income generated from the investment property. This is where you must not neglect to do your due diligence. Ask, verify and double check all income statements before accepting seller financing to purchase commercial real estate. By now, i know you?re asking yourself how to get started and below are some 100% financing techniques you can implement to purchase commercial property with zero downpayment:

Buying Commercial Property With no Money Down ? Research

The best way to identify a good commercial investment property to buy with zero downpayment is through intensive research. Your initial step is to compare the asking price and income with same commercial properties that have been sold in the last six months. You should be looking at how much per square footage those investment properties sold for. Make a note of how much times the rent roll the commercial properties sold for. While no two properties are alike, look for similarities.

Find out what the properties where appraised for and what type of financing is on the commercial properties. Your municipal office is a good place to find all the information you need. Now, you need to compare the financial data with the purchase price of the investment property you?re looking at. Are the figures comparable? Or are the financial figures higher or lower?

Next, you need to visit the commercial properties sold and the investment property you?re looking to purchase with seller financing with zero down payment. Pay attention to the location of all the properties. Look at the management setups on all the commercial properties. Pay careful attention to locations of transportation hubs and shopping malls. Determine if the commercial real estate is located in mostly a poor, middle class or rich areas.

By now, you should have a good feel for how the commercial property will perform. You should also be in a position to know if the investment property is well managed. This stage is to determine if the asking price is reasonable, and to also determine what amount of mortgage the income would support after all expenses. Take some outside pictures if you can and go home to look over the whole data. If it is a good property and the income looks solid, proceed to the next step.

Buying Commercial Property With no Money Down ? Seller Financing

When you approach the seller, you need to find out quickly why the investment property is been sold, amount of any remaining mortgages and if the seller will be willing to finance the whole transaction. Pay close attention to spoken and unspoken words. You must learn to read people. We humans have good intentions, but most will tell little lies because they can always ask for forgiveness later. Your initial meeting with the seller is for the purpose of gathering information.

You can also gather same information over the phone, but nothing beats personal interaction. I have seen sellers of commercial properties say no to the idea of seller financing, but later say yes when presented with an offer that is a win win for all involved. At this stage you should have an idea how much mortgage the investment property would comfortably support and your offer should be based on that.

You can have the seller give you a second mortgage that would represent your down payment. Some mortgage lenders would frown on such setup, but some would say yes so long as the loan to value ratio is within the lending guidelines. I have seen deals whereby the second mortgage is listed as your downpayment and the lender is unaware of the setup. Since the seller is willing, both lawyers can create the legal basis for such setup.

You can have the seller to join you in refinancing the property and then transfer title to your name afterwards. The seller of the investment property gets to keep most of the proceeds and you will be responsible to paying the mortgage and maintaining the commercial property. Trust me, many deals are structured like this daily all over the country. The refinancing works best if the mortgage on the property is very low compared to the appraisal amount.

The seller can also transfer the title to your name and then you can proceed to get financing. Much easier to get financing for an investment property if you?re already the owner on paper. You need to find a willing seller with a commercial real estate with superb income.

Buying Commercial Property With no Money Down ? Using Partnerships

A limited partnership can be structured in such a way to leave you as the majority owner of the investment property with absolutely zero downpayment on your part. The use of limited partnerships is very common, but your first one is usually the most difficult to setup. People you know would be doubtful of your ideas and you need superb convincing powers to pull them in. It is better to setup the limited partnership, before approaching potential real estate investors.

Be very clear as to what percentage would be owned by whom and for how much. Make sure those interested potential investors, deposit the funds in an escrow. Do not accept promises of funding or you would come to regret it. It is also possible to set it up as a personal loan and use the commercial property as collateral. A good argument would be the dismal interest rate paid by banks today. Some banks even charge you money to keep your money. Ask enough people and you?re bound to get some good answers to your desire to purchase commercial property as part of your real estate investment strategy.

Buying Commercial Property With no Money Down is doable as long as you take some of the ideas listed above and get started immediately. Use your imagination in creating your investing business plan and your desire to purchase commercial real estate with money obtained from the seller or loans from investors and lenders can be quickly realized.

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