Commercial Property Can Be Aquired In Any Of
The Below Property Types for your Real Estate Investing.
All Of Them For Financing Purposes Qualify as Commercial
Real Property and or Investment Property.
Below is a list of each commercial investment
and commercial properties and
by clicking on any one, you will then receive further
information about the investment as well as relevant
commercial loan information.
For specific details about each investment category
click on that link. Each of the above commercial
real estate types are treated differently by the
commercial lenders and their underwriters.
Each real estate investment will be underwritten
with a different emphasis as to the required debt
service coverage ratio, loan to value, minimum net
operating income, etc.
All of these terms relating to
commercial investment property will
be discussed in depth. The above terms need to be
understood by the new real estate investor.
By understanding how a commercial loan underwriter
will view and analyze the feasibility of your new
acquisition you can negotiate from a position of
strength with the seller of the property.
For example if you do a quick and dirty calculation
for the debt service
coverage ratio(DCR) and the number is too low,
for example less than 1.05%, you can immediately
tell the seller that the price is too high because
the deal cannot cash flow sufficient for you to
get a lender to finance the property.
A DCR of 1.05% is barely covering the expenses
including the contemplated debt service. A One to
One of 1.00% means that all available cash is paying
for debt service of the new loan, so therefore you
can see that a 1.05% or One to One. Five is just
getting by and giving the investor a small bit of
breathing room.
As a general rule of thumb most conventional lenders
are not going to lend at a 1.05% DCR for Commercial
Real Property for your Real Estate Investing. |
