All Forum Posts by: Ayyoub Ajmi

Hello.

I'm working with a bank for a commercial loan and they are offering what I think is a variable rate every 36 months:

Rate: WSJ Prime rate plus 0.5% (Currently 3.25 + 0.5 = 3.75%)

Rate to adjust every 36 months

Term: 240 months

Is my understanding correct? I'm not comfortable with a variable rate especially when it will only go up from now. Can I request it to be fixed?

I would love to hear your opinion.

Thank you. 

Thanks for your response @Jonathan Stone and @Brent Coombs. I already know that my loan will only cover up to 80% of the value of the property. But I'm not familiar with the commercial loan process. For example, I know that the roof is in a bad shape. Will the bank require it to be fixed before the sale? or they will offer 80% of the appraised value no matter how much work is needed to make it usable?

I already made a lowball offer for cash only. It didn't work. The area is not very competitive "yet". But there are signs of improvement; mostly on the residential side. So it's not easy to figure out what it's worth. Not many comparables. My situation is also different. I'm planning to use the property for my own business and also keep it as an investment for the long-term.

But I agree with you. I don't want to be in a situation where the appraisal comes close to the asking price either. I guess I should just stay within my range and see how it goes.

Thanks again for the suggestions. 

I’m interested in a vacant commercial building that needs a lot of work. I have pre-approval for financing up the asking price but I would rather leave some cash for renovation. Is it a good idea to put an offer and have it contingent on inspection/appraisal? Will this give me an option to renegotiate the price down?

Hello.

I'm actively looking for a commercial property. I want to use 50% for my own business and rent the rest. I found a good property in the area I want and the type of building I want. it is vacant and in really bad shape. I checked the 311 reports and there are tons of citations and neighbors complaining about it. I was able to locate the owners and I'm communicating with them.

I would like to put an offer but I have no idea how much. Similar properties in the same area within a mile or two are on the market for 225K to 250k. The first one is a warehouse/office in great shape. A second one has three storefronts, two of them are leased.

The owners value their property at 250k. I think once renovation and up to code, it should be worth even more than that. but right now, it will need tons of work and money.

I have learned a lot from this forum and I'm hoping that you can educate me more on this aspect.