Hi Guys,
I have spoken to a few mortgage lenders about commercial property loans to try and guage a price range of what I can afford. Their usual reply is, “bring us a deal and I’ll see if I can get you the loan”.
Now, I have had experience with residential property investment and banks can usually tell me how much I can borrow within a few thousand dollars.
I also understand that when it comes to commercial property that it has more to do with rental income, tenant quality and cap rates than it does with personal income.
My question then is, “is there a way I can work out a rough estimate of how much I can borrow when analysing a commercial property deal?”
If this cant be done easily, I know there are a few mortgage brokers on here, so, how can I make your job easier when it comes to how much I can borrow when I bring you the deal?
I Hope I’ve explained myself properly.Cheers Guy’s
Mark“Be a Meaningful Specific rather that a Wandering Generality”
My question then is, “is there a way I can work out a rough estimate of how much I can borrow when analysing a commercial property deal?”
Mark,
each commerial deal is different. Most commercial lenders if not all will lend no more than 10% down. Depending on the type of property will depend on the commercial lenders guidelines.
Commercial is a different animal than residential. You first need to define the type of commercial property you are interested in purchasing. Then we can begin looking at rough estimates.
I am really interested in getting a commercial property loan for a warehouse to be constructed. I earn approx 1k p/w what sort of LVR would they offer me? do you have any nice contacts I can ring?
creativity is more valuable than your next IP purchase
From what you have told us, it would appear that you are purchasing either a block of land and building, or purchasing a completed warehouse. The main focus for lenders is on the strength of the end lessee, and the terms of the lease. Most lenders with a lease will go to 70%, but if you are willing to pay a bit more (app fees and Int rate) you can go as high as 85% but the deal has to be pretty strong for this particular lender.
If you can share some more information, we can help you further.Wade Greasley
Bluewater Financial Pty Limited
Residential and Commercial Lending Brokers
[email protected]
‘Discover the Bluewater Difference”
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