All Forum Posts by: Laura Casner

A variable rate that high would make me cautious too. If you can, I'd at least get a second opinion from a lender experienced in SBA 504 loans-yes, they can be more paperwork, but the fixed-rate portion can give long-term stability. You might also explore local banks or credit unions that sometimes offer owner-occupied CRE loans with better terms, or even negotiate seller financing to bridge until rates improve.

That’s a valid concern variable rates can eat into cash flow if the Fed hikes again. I’ve seen other buyers in similar situations compare 7a terms against creative financing, seller carry, or even short-term bridge loans until rates settle. The 504 can be a slower process but it does lock in a fixed portion of the debt which helps with predictability. Feel free to connect if you want to talk through different funding scenarios  I work with a lending company and can share what I’ve seen work in similar deals.

You need to create objective data. Not just feeling 5% off. If it was for my business 5% of Purchase Price is worth it for the control of my site. Is it a single tenant with multiple units, or other tenants paying rent?

As an agent myself, what you might want to consider is finding an agent knowledgeable in commercial deals and negotiate a lower commission based on the fact that they are only helping you with the negotiations and paperwork. I am a firm believer in not lowering my commission for anyone, but I think this would be a time when I would consider it fair since I am not doing a big part of the upfront work. 

OP definitely run the contract thru attorney.   

This is a standalone building?  Since you’re familiar with the building I would look more outside.   Can you describe the building and the surrounding common areas, signage, parking, etc?  Is this an older building?  Any grandfathered in issues that will go away?  Any epa issues?  External utility issues?  Do you get or have the google map address? Etc.  Etc.

At this point you are right that much of the agent's job is done OTHER than being an advocate for you with intimate knowledge of the documents and paperwork involved.  Thus, while seller has made it clear they will not be paying for any commissions, and a real estate agent may not be the best bet, you may want to have an advocate for yourself to review the documents and ensure everything is kosher, especially if this is a new area of investment (commercial is different enough from residential to justify this in my opinion).  Hiring an attorney to take a look at the drafted documents from the lender and the seller will actually cost less in many cases then the percentages charged by a real estate agent, and could save you significant heart ache in the long term.  Even just knowing that you will have one can affect how the documents are drawn up.  My firm does not offer this type of representation, but if you don't have a specific connection, Martindale.com is a decent option for finding local representation.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

I purchased a commercial space without an agent, before I became an agent. I ran into a few problems. The "association" was ran by one owner who acted as president, treasurer and secretary... and he/she was comingling funds and had the wrong insurance on the building etc etc. Even though the seller paid for an inspector, I probably should have hired one myself instead of letting him run it. I later found termites in one area and recently found the entire building was not grounded. If I was going to do it all over again, I'd find a commercial realtor who has a CCIM designation and specializes in the commercial asset class you're interested in. Even when a portfolio has be valuated, someone like a savvy real estate accountant or CCIM can double check their numbers. I'm assuming they had a proforma. Did they show you the actual financial analysis backing up their valuation?