Hi everybody,
Partner and i want to purchase a commercial space for $585k which is returning $4,000 profit per month and has 3 year lease left with option for 2 year extension. The space has two floors so we are able to rent the space separately if needed and the building is only 3 years old.
My partners salary is $110k including company car and we have around $85,000 in savings and no debt. We are renting at the moment $290 per week which i'm going to run my business from and able to claim half the household expenses.
I would like to know how much bank usually borrow when it comes to commercial property and what chances do we have of purchasing thris commercial space.
please advise of what should we do? this is urgent!
thanks.
Michael
Commercial deals are not like residential finance. There are few standard deals. You really need to speak to a good commercial broker.
Typically rates start a bit higher than resi loans with LVRs around 70%. If the LVR rises then so does the rate – markedly so.
Depending on what security you offer we might be able to combine a resi mortgage with a commercial one to reduce the rate and fees.
If you need a commercial broker to take a look please email me your situation in 3-4 paras and I will pass it onto the guy my clients use to take a look. He will let you know if it is doable or not. I don't make a practice of offering my services but this is unusual and urgent.
All the best mate,
If the property is tenanted you could look at Citibank who will go upto 85% LVR subject to income, and location of the property.
I do a fair amount of Commercial / Development deals but as i am leaving for the UK in the morning you would be better of to try the lender direct.
Richard Taylor | Australia's leading private lender
As a general rule up to 70% is considered standard however unless the property is considered specialized then up to 85% can be achieved.
You must also consider that establishment and valuation costs tend to be much higher than residential.In this case your $85k is almost enough for the deposit at an 85% lend however I would expect that you will need to find @ $12k for costs.
You will also need to check if GST is included in your purchase price often it is not so you will need to add a further 10% to the purchase cost.
Commercial loan are often slower to complete so it is not something to place unrealistic expectations on achieving short settlements.
Regards
CraigHi everybody,
Thank you for all the help! I will look at approaching few lenders and Simon when i gather more information on the commercial property i will email you with my details.
I will let you all know how everything is progressing.
Thanks once more!
Michael
Hi all,
I am looking at commercial property in NSW for $400K on 8.2% gross yield. However, I am looking for commercial lender who is willing to go up to 80% (because I have enough deposit to cover 20% deposit and settlement costs) without the lender jacking up the rates to ridiculous level.
Can somebody give me some pointeres?
Cheers
JohnHi John
80% is available at a sensible interest rate dependant on the location of the property and the type of security.
Richard Taylor | Australia's leading private lender
Hi John
80% is available at a sensible interest rate dependant on the location of the property and the type of security.
Richard Taylor | Australia's leading private lender
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