HOW DO YOU DO IT?!

What does one have to do to get some financing?! Is there a lie that all clients tell on applications forms that no mortgage broker/lender will call you on? I am missing something here, I know it!

I'm trying to get into commercial real estate. How does one purchase a piece of commercial real estate with nothing down? I can't get a realtor with no financing and I can't seem to find any financing without a very large checking account.

I know there is another way. Can someone please enlighten me?

Edited: 06/26/2010 at 10:15AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75537 Influence
15 Awards

Icon_minipost Oct 27 '09, 02:54 AM

If you're serious about commercial real estate, you have to have a down payment.

Yes, there are people will millions of dollars to invest. Maybe not in a checking account, which would be foolish place to park cash, but readily accessible, liquid and ready to invest. Especially right now when so much money has been pulled out of the stock market.

I hear its possible to find low down or no down deals. But now you're trying to find a great deal (the only kind you should buy) AND one that has creative financing. Either is tough. Together is that much tougher.

Lets be realistic. If you're buying a multi-million dollar apartment building or strip center, and there is the possibility of having a $10,000 expense with very little notice, do you really want that liability if you don't have cash in the bank?

Edited: 06/26/2010 at 10:15AM

Jon Holdman, Flying Phoenix LLC

P NW

· OR

1467 posts
12410 Influence
7 Awards

Icon_minipost Oct 27 '09, 06:23 AM

What do you have to do to get financing? Simple. Have good credit and be able to prove where the money is coming from to pay the loan back.

Commercial with no money down? I don't know. Maybe you could find an owner carry.

It's hard for me to imagine an owner carry with no money down, but you never know. Even with no money down, if it is a business you still need to pay for inventory separately. If it is an apartment building, you still need cash to pay for repairs, taxes, insurance, vacancies, and don't forget closing costs.

Maybe if you have no money, you might want to consider starting smaller and build up a cash reserve.

Edited: 06/26/2010 at 10:15AM

Peter Giardini

Real Estate Investor · Baltimore, Maryland

546 posts
8080 Influence
11 Awards

Icon_minipost Oct 27 '09, 07:47 AM

The commercial world has some pretty exacting standards.

The big boys and girls place at this level and any realtor worth their salt will not want to spend time dealing with an inexperienced investor who does have any money. The deals are just too few and far between to allocate their time in that manner.

There is no magic trick!

Learn the real estate game by getting involved in the residential world, learn the game and then work your way into the bigger stuff.

By the time you are ready to move to the next level you will have realtors, lenders and many others ready willing and able to assist you.

Edited: 06/26/2010 at 10:15AM

J Scott

Real Estate Investor · Atlanta, Georgia

6084 posts
66723 Influence
13 Awards

Icon_minipost Oct 27 '09, 11:42 AM

Like others have said, breaking into commercial without cash, credit or equity partners is not going to be easy, especially in this market where few have any equity and even fewer are willing to owner finance.

Yes, there is certainly plenty of money out there looking for a home (though in T-Bills, not checking accounts :), but without credit, experience, collateral or an amazing deal, it's going to be hard to get your hands on...

Edited: 06/26/2010 at 10:16AM

Curt Davis

Wholesaler · Memphis, Tennessee

1108 posts
6055 Influence
7 Awards

Icon_minipost Oct 27 '09, 01:14 PM

Naji,

Trying to buy commercial property is like trying to look for a unicorn, it doesn't exist. You actually have to be an investor and have some money for this. Its hard enough for investors to buy SFR's with no money though it can be done if your buying junkers.

Save up some money or find a money partner and together you might be able to get some commercial.

Edited: 06/26/2010 at 10:16AM

Curt Davis, buyMemphisnow.com
E-Mail: crtdavis@gmail.com
Telephone: 901-881-0552
Website: http://www.buymemphisnow.com
Full Service Real Estate Investing in Memphis TN

Brian Haskins

Real Estate Coach · St. Louis, Missouri

421 posts
1984 Influence
2 Awards

Icon_minipost Oct 31 '09, 02:02 AM

Your first mistake is thinking there aren't people out there with money just sitting there because there is. Tons of them. You need to find them and market to them there are tons of creative ways. You're looking for people with self directed ira's as far as purchasing with no money down good luck. you can buy lists of people that would potentially be able to lend you money. try www.listsource. com

Brian Haskins

Edited: 06/26/2010 at 10:19AM

Rich Weese

Real Estate Investor · sioux falls, South Dakota

4293 posts
43789 Influence
15 Awards

Icon_minipost Oct 31 '09, 03:33 AM

You have received great replies. I love the unicorn comparison.
1.There are people with millions of dollars. They normally obtain those by making wise decisions. What would make loaning someone with no experience 100% financing a wise move
2.If you are willing to lie on an app, or look for a way to misrepresent, why would anyone feel comfortable lending to you?
3.Why would a realtor want to spend his time for free helping you hunt the elusive "unicorn"?
I agree with the other posts. Get some savings. Take your time. Start smaller . Gain knowledge. Then, somewhere down the line, use your experience to move to larger projects. As someone that has personally OVER 1000 sfrs, and thousands of apts, both categories can be very rewarding. Rich

Edited: 06/26/2010 at 10:19AM