Expert Commercial RE Advice, Will Trade Online Marketing Advice

Expert Commercial RE Advice, Will Trade Online Marketing Advice

Malden, MA · Member since 2014 · 19 posts · 2 votes

Hey Guys!

Just wanted to begin by saying thank you very much in advance and that any help is appreciated. Taking action is something I can do, I'm just trying to minimize my mistakes and to look for some guidance.

I know time is more important than money and I'm not one of those people who expects things for free. I run an online marketing company (mainly for ecommerce) but I've been doing online marketing for over 8 years. 

So here we go ->

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My Goal: I'm trying to find the best way to start commercial investing in my current situation. Basically, I'm trying to find the best/easiest way in with the least money down and the ability to build a system for growth.

My situation: I run an online marketing company and our lease is expiring in a month.

My initial thoughts (these might be dumb because I don't even know if it's allowed or if it makes sense) -> 

1)Buy through my current company using an SBA Loan 504 loan. Create a new LLC in future and sell the business property to this new LLC (I don't even know if this is possible). I'm assuming the new LLC will need to have history before a bank will loan them but would they be able to just look at all my personal history, add in some collateral and take the whole picture into account?

2)Buy through my current company using an SBA Loan 504 loan. Sell it to me personally and move it to an LLC after. Is this even allowed under the 504 loan rules? Does this even make sense for taxes?

3)Start the regular way which is to just buy it personally (which makes it harder), move it into LLC and try to grow a system.

Again, thanks in advance for any replies!

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  • Lender · Ledgewood, NJ · Member since 2017 · 6 posts · 1 vote
    9y

    Darwin, will try to answer and hopefully I reading your post correctly.

    If you are looking to buy commercial property in which your marketing company will occupy over 51% of the space, then SBA financing is an option (504 or 7(a) loan). You would set up an LLC holding company for the real estate. That LLC will be the "borrower" and the guarantors on the loan will be your marketing company and you personally.

    Ultimately this depends on your marketing company's financial performance and the ability to service the proposed mortgage. Since you currently lease that is good, as that lease payment is added back into the cash flow analysis.  (fyi, lenders also look at your personal income/expenses to make the loan decision - called "global debt service coverage ratio").

    PM me if you have any additional questions.

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