Commercial short sale negotiator

I know there are many companies offering short sale negotiations for residential.Does anyone know of anybody who specializes in commercial short sale negotiations?

Edited: 06/26/2010 at 10:56AM

James Ward

Real Estate Investor · Ocala, Florida

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Icon_minipost Jan 13 '10, 07:39 PM

Tom,

Commercial Short Sales are not an easy task. Just to let you know:
1) They take enormous amounts of time and efforts.
2) Most companies will require a deposit.
3) Each will also have guidelines that will need to be followed.

What exactly are you looking to accomplish?

Edited: 06/26/2010 at 11:13AM

Tom Kirchner

Real Estate Investor · Huntersville, North Carolina

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Icon_minipost Jan 13 '10, 08:06 PM

I've just started looking into commercial short sales and am researching the the different tools I'll need to succeed.

Thanks for the input.

Edited: 06/26/2010 at 11:13AM

James Ward

Real Estate Investor · Ocala, Florida

748 posts
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Icon_minipost Jan 13 '10, 08:34 PM

I will be more than happy to answer any questions that you might have.

Edited: 06/26/2010 at 11:13AM

Scott Hubbard

Rehabber · Tucson, Arizona

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Icon_minipost Jan 14 '10, 03:59 AM

I concur with James. It is time consuming, takes a whole another skill set, and the investor will need to prove capacity. I would charge an upfront fee (deposit) or require an interest as it quite an undertaking.

The interesting thing about commerical properties is that much of it is held by institutional investors (REITS and other large investors). These will never actually even hit the market as these assets will be refinanced in large pools.

The non-institutional properties held by non-syndicated investors are where the opportunities will be.

Good Luck!

Edited: 06/26/2010 at 11:13AM by Scott Hubbard

Maryann L.

Real Estate Investor · Methuen, Massachusetts

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Icon_minipost Jan 16 '10, 01:29 AM

James, What constitutes a commercial short sale? 5+ units? OR do you mean commerical type buildings....

Edited: 06/26/2010 at 11:14AM

James Ward

Real Estate Investor · Ocala, Florida

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Icon_minipost Jan 16 '10, 04:00 AM

Here is the definition:

The term commercial property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income.

Commercial property includes office buildings, industrial property, medical centers, hotels, malls, retail stores, shopping centers, farm land, multifamily housing buildings, warehouses, garages, and industrial properties. In many states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.
-as per Wikipedia

Edited: 06/26/2010 at 11:14AM

Maryann L.

Real Estate Investor · Methuen, Massachusetts

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Icon_minipost Jan 16 '10, 05:06 AM

Hmmm...interesting. I have an agent that brought me information on a 6 unit property. Nothings happened yet, but I wonder the difficulty.

Technically a duplex would generate profit from rental income, and I've never had a problem with duplex properties. Although I haven't done anything bigger than a 3 unit either.

Hmmmmm...

Edited: 06/26/2010 at 11:14AM

Hazel L

Real Estate Consultant · Irvine, California

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Icon_minipost Mar 30 '10, 04:06 PM

Very interesting ideas. From looking at CAR laws, 5 or more units are considered commercial. This opens up a whole new realm of possibilities...

Edited: 06/26/2010 at 12:17PM

Don Konipol

Note Investor · Tempe, Arizona

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Icon_minipost Mar 30 '10, 04:52 PM

Although because of HUD financing guidelines every piece of real estate other than 1-4 family residential is considered commercial, this is not the true definition of commercial property. Commercial property is property not of a residential nature. Therefore, a 200 unit apartment complex is a residential property and not commercial. the opportunity for the individual small to medium sized investor in commercial properties is in those properties not considered suitable for institutional ownership. This can be because of size, price, condition, location or even type of property. When a property is not attractive to institutional buyers, it becomes very possible for the real estate investor to acquire the property at a reduced price and at an increased cap rate.
One unique way to acquire commercial properties at large discounts is to originate or purchase a hard money loan on a property that you wouldn't mind owning at a substantial discount. If the borrower makes the payments you earn 15% or more on your money, a good return in this low interest rate environment. If the borrower defaults you obtain ownership of the property. As long as the loan was made at a low LTV, 60% or less, you should be able to obtain ownership at a large discount.

Edited: 06/26/2010 at 12:17PM

Hazel L

Real Estate Consultant · Irvine, California

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Icon_minipost Mar 31 '10, 04:25 AM

Interesting strategy, Don. The hard part would be finding a suitable location. Here in Orange County, which is a very popular place to have business HQ's, there are many commercial buildings that have been empty since construction because the recession is hitting businesses so hard.

That being said, as markets are being oversaturated with residential short sale negotiators, what's your opinion on negotiating commercial short sales? True, it might be more time and skill intensive, but what if the effort and time from one commercial deal was equivalent to say, 2 residential deals but the commission was equivalent to that of 5 residential deals?

Edited: 06/26/2010 at 12:17PM by Hazel L

James Ward

Real Estate Investor · Ocala, Florida

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Icon_minipost Mar 31 '10, 05:53 AM

Hazel,

Commercial Short Sales do not work like Residential Short Sales.
Yes, the compensation is much greater, but so is the time and effort.
I will negotiate a Commercial Short Sale, but require several items. If you look at a post above you will see those items. Since 'most" investors do not want to put down a deposit, it weeds out most investors.

But, the profits can become very large if the deal is structured correctly!

Did I even come close to answering your questions?

Edited: 06/26/2010 at 12:17PM

Hazel L

Real Estate Consultant · Irvine, California

113 posts
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Icon_minipost Mar 31 '10, 06:58 AM

Hi James, yes you did, I just wanted to clarify that I have a former VP from the mortgage industry on my team who is currently negotiating residential short sales. From my website, you can see I'm coming from a bird dog perspective. This guy does commercial short sales on occasion and is really good at it, but I ask because I'm considering channeling his efforts toward more lucrative endeavors while I market for leads.

Edited: 06/26/2010 at 12:17PM

James Ward

Real Estate Investor · Ocala, Florida

748 posts
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Icon_minipost Mar 31 '10, 09:01 PM

Oh, so you were just wanting to lead me into an ad for your company.

Okay, no big deal.

Edited: 06/26/2010 at 12:18PM

Hazel L

Real Estate Consultant · Irvine, California

113 posts
877 Influence
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Icon_minipost Apr 01 '10, 05:43 AM

Just trying to be as clear as possible, we don't do properties on the east coast fyi.

Edited: 06/26/2010 at 12:18PM