Need Expert Guidance

Member since 2026 · 1 post · 1 vote

Hi!

I would like to seek your expert advice.
I'm very interested in a corner lot commercial property on Main Street, located within a mile of elementary, middle, and high schools, as well as a community hospital and college.
My plan is to establish an artisan bakery and café. I’m looking to purchase this property as an investment.
Could you tell me what lenders typically require from buyers, such as down payments, work history, and other prerequisites?
When I do my due diligence, what key factors should I check to avoid issues later, like zoning restrictions or other limitations?
Additionally, I would appreciate any suggestions to help me succeed in this new business venture.

Thank you!

Carrie

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Michael K GallagherBusiness Member

Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes

7mo

@Carrie Miller welcome! is this a vacant lot you are trying to develop or a property with a building already on it? if the later, It is traditionally an easier route to lease the space and not incur the liability of the building ownership in the early years of a business. And if you lease the space it is common and customary for the LL to supply the tenant with an allowance to help with startup costs.

If you are just starting out I would expect a personal guarantee to be requested but overall this ends up being a less risky way to start up rather than purchase the building and build it out.

[email protected]614-362-2231

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Taylor DaschBusiness Member
Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
7mo
Hey, getting to 90% CLTV with a 650 score is going to be pretty tough for a first-time rental, especially with most national DSCR lenders. They usually want to see at least 20% down and often a 660-680+ score to make the numbers work.

Your best bet might be hitting up small local banks or credit unions right in that coastal area. Sometimes they have portfolio money and can be a lot more flexible if they like the deal and know the local market. Have you tried calling around to any community banks in town yet?
[email protected]254-718-4249
Taylor Dasch | EG Realty561 Reviews
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Michael K GallagherBusiness Member
Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
7mo
@Carrie Miller welcome! is this a vacant lot you are trying to develop or a property with a building already on it? if the later, It is traditionally an easier route to lease the space and not incur the liability of the building ownership in the early years of a business. And if you lease the space it is common and customary for the LL to supply the tenant with an allowance to help with startup costs.
If you are just starting out I would expect a personal guarantee to be requested but overall this ends up being a less risky way to start up rather than purchase the building and build it out.
[email protected]614-362-2231
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Robert C.
FL · Member since 2013 · 41 posts · 34 votes
7mo
What kind of total dollar amount are you talking about with the purchase?

Environmental, zoning/use, and survey are the biggest due diligence items in commerical.

Commercial real estate due diligence can run well into the five figures, even six figures, depending on the size of each deal and how deep a borrower wants to go. The size will depend on what you hire others to do or do yourself.

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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
7mo
OP. First step is for you to run your business numbers. Have you done that yet? I would not approach a lender until you have those locked down. Most require experience in your venture as a requirement, before even considering the Real Estate angle.
I would expect negative cash flow for the first year as part of your business plan. Do you have the financial backing to cash flow the operation for the first year.
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