According to a survey conducted by the National Association of Realtors, the majority of all commercial real estate transactions involve some type of financing. This means that buyers with pre-approved or proven loans will usually have an advantage over other buyers. If Florida commercial real estate investors follow a few valuable tips, they will improve their chances of securing financing and winning the bidding war.
The first step is to find the right broker. Commercial loans can be highly complex, so finding the right person for the job can have a big impact on the process. Next, investors will need to decide who to identify as buyers. Lenders will use the least favorable information about each applicant to make their decision. Therefore, any history of bankruptcy, mortgage default or criminal activity could disqualify the entire group.
Once the broker and buyers are chosen, each individual buyer needs to obtain a preapproval letter. To get this, each person will have to provide two years of tax returns, a credit report and a personal financial statement. If each individuals gets approval, the lender will then carefully evaluate the property that's to be purchased. This might be the most important step of the process since the characteristics of the property will affect the investors' ability to receive competitive, high-leverage financing.
When applying for a commercial real estate loan, it can be very helpful to have a lawyer provide support and guidance. Lending documentation can be very complex, and it's the job of an attorney to examine each clause to ensure a contract is in the best interests of their clients. Obtaining counsel is important whether the commercial property is a warehouse, retail location or office building.