Commercial Lease-Option vs OF (builder needs help buying land)

3 Replies

My question is I am a builder in search of commercial land to build my design on. I found some that are free and clear and was wondering how to structure a lease purchase - balloon vs make an owner finance offer rather than cash offer. Our commercial banker is requiring 20% down, we can put that in anyway we want, land or building. Land prices range from $2-12 per square foot here. I figure if I can cash flow the land put our cash requirement into the building, it would reduce our up front cost. 20 year loan is the max they go on commercial, and payment. I can on a cash flow basis afford more land if it is amortized over a term to develop the area as an exclusive builder.

New to commercial, isn't alot of commercial land leased by companies with a balloon? Or does owner finance make more sense? 

BTW: I'm creating an "Paramount Real Estate, LLC " entity for the purchase that Paramount Construction, LLC will lease from. This building will be a two-story home-office, lower commercial for us, upper single family loft to reside in.

Thanks in advance. 

What bank are you dealing with?  Bank of the West should have good commercial rates.    I've also done a deal with Brian at Relianz bank -- great and easy to deal with - 

You might get better terms looking at a bank outside of our market US Bank, Wells Fargo etc....probably a bit more legwork, however some banks in Wichita are TOOO conservative and rip you on closing costs.

although I don't know squat about commercial loans 

I'll echo Shane's recommendation of Brian from Relianz at 21st and Ridge.

Doing a bunch of loans with him right now and has blown my expectations out of the water.

His goal is truly to try to find a way to get his clients as close to possible of what the client is seeking. He truly tries to "find a way" . 

Just confirmed with Brian ; they actually specialize in Commercial loans.


Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here