Not all Small Commercial Building For Sale Near Me in Montague Gardens should be auctioned, but the auction method of sale does have real advantages if the property is just right and the market is accepting of that method of sale. Here is why.
The key governing factors to determine if auction is a real chance or choice for the commercial property owner are the current levels of enquiry for that property type, and the prevailing business sentiment. If this is the case then you can look further at auction.
The auction method of sale is a proven time based sale process that flushes out the enquiry and if the investment property ticks all the other boxes such as acceptable (and not excessive) levels of comparable property on the market that are competing with the subject property coming up for auction.
Do not overlook the advantages of auctioning a commercial property. Just make sure all the other existing elements are in support of that method of sale before you start, which is why they use commercial business industrial property buildings for sale agents.
How Do You Select The Commercial Business Industrial Property Buildings for Sale in Montague Gardens?
"Property on ground lease" is among the most confusing phrases, even to commercial real estate brokers. There are up to 3 parties in a "property on ground lease": the business owner, e.g. Burger King, the landowner and the building owner. When you see a sale of "property on ground lease", it could mean:
1. Sale of land only. In this case, the building owner is the tenant, e.g. Burger King that has a business in the building. The tenant typically signs a 10-20 years absolute NNN ground lease with the landowner to lease the parcel. Should the tenant not renew the lease or be in default of the lease by not paying rent, the building with substantial value is reverted to the landowner. The tenant will make every effort to pay rent to avoid losing the building to the landlord. And so the cap rate for this property is about 1-2% lower than a property with both land and building.
There are a couple of possible scenarios that could lead into a land sale only:
· The business owner, e.g. a Burger King franchisee, could own both land and building originally. He then structures the sale of land only to an investor and then leases it back. He receives the tax benefits of being able to depreciate 100% of the building and fixtures. The tenant could later sell his interest in the building without the land to another investor and lease back the building.
6. Is it easy to sell your interest if the lease has a few years left? If you own the land, your interest may be hard to sell, but still sellable. Once the ground lease expires, the building owner owns nothing. As a result, this can make it quite challenging to find a buyer for the building.
7. Tax write-off's: Land does not depreciate for income tax purposes. The building, on the other hand is 100% depreciable.
8. Financing: if you buy the land portion, you should be able to obtain 65% LTV financing in today's market, just like a typical property with both land and improvements. However, it's very difficult to get financing for the building acquisition, especially when the ground lease has less than 20 years left.
Therefore, when you see a "property on ground lease" for sale, make sure you know what you are buying, considering there are many factors involved that can adversely impact/contest an investor's decision. If you're contemplating on buying the building without the land, think twice and make sure you have a clear understanding of all the plusses/minuses involved in this decision.
What commercial property types should you buy? You should consider the pros & cons of each property type, as well as, have a good understanding of your investment objectives and your experience. These factors will help lead you to your ideal commercial property.
Listed below are the most common commercial property types.
Apartments or multi-family buildings are usually the first choice for new commercial investors. Apartment management and financing is very similar to residential, and so new investors feel more comfortable with them. The main disadvantage with apartments, is that they are management intensive.
In order for an apartment to be considered commercial property, it must have 5 or more units. There are numerous sub-types of apartments:
When you are looking at properties to purchase, pay close attention to the location and general market for that area. You will want to avoid properties that are located in economically depressed or seasonal areas. Also, the property should have acceptable aesthetic qualities to be competitive with market standards and have a minimum occupancy of at least 85%.
What if the property you are evaluating has inferior physical characteristics or is in an economically depressed area?
You may have a higher interest rate, higher reserves and tighter underwriting constraints.
These property types are nursing homes, congregate care and assisted living centers. Properties should be close to retail and community services. Be cautious of properties in economically depressed or seasonal areas. Also, be sure that the property complies with ADA requirements.
Hotels are characterized as either Full Service or Limited Service.
Full Service Hotels can be further divided into Luxury, Upscale, Mid-scale, and Extended Stay hotels.
Limited Service Hotels can be further divided into Mid-scale, Economy, Budget and Extended Stay. When considering hotel properties, the property should have a stable operational history. A property with a history of four or less years should be scrutinized. The minimum acceptable occupancy is usually 60%. Lenders also prefer franchise affiliated hotels with franchise agreements extending beyond the term of the proposed loan.
These property types will have usage for industrial purposes only. Such as
Also is called Mini-Storage, it is used for personal storage for lease by consumers.
These property types are unique and the financing them can be difficult. They include
gas stations, oil change facilities, etc.
Find All Small Commercial Building For Sale Near Me in Montague Gardens
Though it is certainly more common, and in many cases easier, to find deals with the single family houses, there are times when the opportunity presents itself to acquire a commercial property. And if you are a person who desires to pursue this venture, there are a few things you want to keep in mind when doing this. Following these simple steps can help speed up the process of getting some of these big deals in the pick line.
First, FFN offers a Commercial Property Boot Camp. This is a must if you want to pursue this arena of the real estate business. This course will teach you all the ins and outs of going through these business transactions. See the website if you want to know when the next one will be offered.
You will also want to keep your eyes open when you're riding around town, especially for fiz-bow signs (FSBO - "for sale by owner). If you see fiz-bow signs on big tracks of vacant land or any type of property, you will certainly want to call those numbers. When you are dealing with fiz-bow in the commercial property world, there is usually a reason they are trying to sell these properties themselves. And sometimes this can lead to some really good deals.
Tips for Selling Commercial Property
If you want to earn more than what you get when working with an employer, it is high time for you to invest and start up your own business. But of course, before investing and putting up a business, you have to see to it that you can do and what business can you put up to make you obtain success. No doubt Miami is one of the cities in Us that is growing and know for its high business opportunities. With this, there are more and more individuals, who visit that city, enjoy and have fun. There are also some who stayed in the city for good, either they wish to explore the beauty of the city or they want to obtain success through the job opportunities in Miami.
In your desire to buy a Miami commercial real estate property, you have to give time, effort and alertness. Of course, you wish to get the right property in order for you to easily cater your target market. So you have to choose the right location or neighborhood in order to assure that things will work out well.
You can use the internet in looking for Miami commercial real estate properties to choose from and pick the one that you think is the right one for you.