All Forum Posts by: Brandon G.

Hello,

There is a commercial property I am looking to get under contract, pending financing, to build a self-storage facility and have a few questions.  Is it typical to put down a deposit to get a piece of property under contract?  As the buyer of a piece of land, with nothing on it, for commercial use, what is typical of costs that the buyer will be responsible for?  Half of closing costs, etc?  If there is a deposit ($2,000 is what the owner has suggested) for getting under contract and I am for some reason unable to get financing, I presume that payment is completely lost, correct?

Thank you,

Brandon

Thanks Zach.  I posted this as a JPEG, which should allow it to be expanded.  Does that allow it to be seen?

This is my first new construction and I would be very interested in the opinions of others with experience.  This is for a self storage facility that includes 4 aces.  The plan is to develop half the acreage with 3 or 4 buildings and expand in the future.  One thing to consider is that I believe the costs for running electricity is inflated, however I have left it as a conservative estimate for now.  The columns in Bright Red correlate to starting with 3 buildings, the Dark Red correlates to 4 buildings. 

Thank you,

Brandon

Thanks everyone for all of the good information.  So I shouldn't be overly concerned about being able to refinance out of a balloon loan, provided the business doesn't tank.  It still makes me somewhat uneasy.  This is my first dealings with a commercial loan. 

So, in my example, I plan to have new construction and have a self storage business on the land.  Once the business is up and running and making money, it would be hypothetically worth more than the sum of its parts if it is a money making business, so then I would be able to refinance with an asset that had gained equity.  Is that the correct way to think of the situation?

Thank you everyone for the information.  So is it typically for people to get a balloon payment and refinance shortly before it comes due?  What I mean is, is this a type of typical, expected or industry standard practice for commercial loans?

thank you,

Brandon

Thanks for the reply.  I'm looking more to understand the commercial loan process better.  Why do some calculators require the balloon and some do not?  Why do some only have 5,10, and 30 year loans but not 20? 
Is it typical to refinance a commercial loan before the balloon payment?

Thanks,
Brandon

Hello,

I am trying to calculate a commercial loan and have some questions.  I have tried to use several online calculators and they all have varying degrees of criteria.  Some require a balloon payment in years and others don't mention it.  Do all commercial loans require this balloon payment?  If so, do you refinance before or after you reach that point?

I am trying to find the real numbers I would be paying monthly but I'm finding that so many different things I read do not all align I'm not sure how to make sure I'm getting real numbers.   For example, if I am going to take out a $550,000 loan, with $100,000 down and the loan is for 20 years and the interest rate is 5%, how would I calculate this to get my real world payments so I can make sure I'm running my numbers correctly.

Thank you,

Brandon

Thanks for your responses, I appreciate it.  I'll be meeting with a loan officer this week. 

I'm looking at 3.5 acres that is commercially zoned and has a small

warehouse on it. I want to construct mini storage on the lot. I would

like the forum's opinion on how I should structure the loan. Should I

purchase the land (bank loan) and then after owning the property get a

construction loan to build the buildings/lot/etc, or should I get one

commercial loan that will include paying for the property as well as the

building and construction. The owner is a individual, private owner.

The construction will be handled by a local contractor that I have a

small previous relationship with. For what it is worth, there is a time

factor involved in that there is a large corporation that is also

wanting to purchase the property and ready to do so quickly.

Your opinions are appreciated.

Thank you,

Brandon