Real Estate Investor · Indianapolis, IN · Member since 2010 · 5 posts · 0 votes
I have done two commercial deals and several single family deals. Have not done any Commercial Short Sales but I am curious about this market. Can someone please recommend a credible source of information.
Although commercial short sales are similar to residential, there is a much larger emphasis on providing proof of financing.
1. Confidentiality Agreements.
2. Required non-refundable earnest money deposits.
3. A much larger emphasis on providing verifiable third -party support for your valuations.
4. Heavy emphasis also doing your due diligence upfront as there will not likely be an inspection period like in residential.
5. Your likely going to need a good Re attorney or at lest very good commerical agent with experience in underperforming commercial assets.
6. Be prepared to pay fee to the lender for appraisals, inspections, survey, and even upfront fees to the SS lender.
In my opinion, you need more capital, a better team, and a lot of patience in commercial RE. The person representing the bank is going to be much more skilled, less patient, and very adept as negotiation. Therefore, you will need to step up your game.
Although commercial short sales are similar to residential, there is a much larger emphasis on providing proof of financing.
1. Confidentiality Agreements.
2. Required non-refundable earnest money deposits.
3. A much larger emphasis on providing verifiable third -party support for your valuations.
4. Heavy emphasis also doing your due diligence upfront as there will not likely be an inspection period like in residential.
5. Your likely going to need a good Re attorney or at lest very good commerical agent with experience in underperforming commercial assets.
6. Be prepared to pay fee to the lender for appraisals, inspections, survey, and even upfront fees to the SS lender.
In my opinion, you need more capital, a better team, and a lot of patience in commercial RE. The person representing the bank is going to be much more skilled, less patient, and very adept as negotiation. Therefore, you will need to step up your game.
That's interesting. I almost never do non-refundable EMDs.
Originally posted by Scott Hubbard:
4. Heavy emphasis also doing your due diligence upfront as there will not likely be an inspection period like in residential.
Although some sellers/lenders will demand the due diligence to be performed upfront, this practice isn't universal. Some buyers always demand to be able perform all of their due diligence while under contract, and will walk otherwise. (I'm in this camp.)
Originally posted by Scott Hubbard:
In my opinion, you need more capital, a better team, and a lot of patience in commercial RE. The person representing the bank is going to be much more skilled, less patient, and very adept as negotiation. Therefore, you will need to step up your game.
Although I agree that many commercial bankers are usually more skilled and very adept in negotiations, I've found them to be far more flexible on terms and more patient concerning the timing.
In drawing parallels to residential, I simply was trying to point out there are differences. I never put EMDs on residential SS's. In commercial RE there are upfront costs.
I suspect my definition of commercial RE differs from most and for that I apologize. To clarify: I, as do most others, do not consider small multi-family, single box storefronts, and mobile home parks as commercial.