Understanding Commercial Lending on Long Beach Island
Commercial Loans in the LBI Real Estate MarketLBI Commercial Real Estate
There are some excellent opportunities to purchase an investment property in commercial real estate market on Long Beach Island. While commercial real estate sales are slow and then other property types in the LBI real estate market, they can prove to be a lucrative investment that will both appreciate in value and generate income. Typically, the cost of entry will be lower on commercial real estate as it is a specific use and commercial loans in the LBI real estate market can be somewhat difficult to obtain. Having a strong terms, for example having a commercial loan in place prior to making an offer, can greatly enhance your negotiation and result in a fantastic investment.
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Commercial Loans in the LBI Real Estate Market
There are some important things to keep in mind when looking at a commercial real estate transaction. First and foremost, every transaction is different and they are typically quite different from a residential real estate purchase. It is important to discuss your individual situation with a commercial bank, however there are some generalizations that can help a buyer to understand both the commercial real estate market and commercial loans. For example:
- The down payment will typically be higher and the terms for qualification will be more strict
- Commercial appraisals are typically more expensive
- Bank fees and points are almost a certainty
In the world of commercial financing, many people assume that simply having good credit will all but guarantee qualification for a loan. Commercial loans look at several factors, including good credit which is more of a requirement that it is a bonus. Having additional equity or having an established business background are also highly advisable, is not required to qualify for a loan. Commercial loans will typically see between 20% and 25% require down payments on a transaction.
Commercial appraisals are more expensive than a residential real estate appraisal. The fees will vary depending on the company and the size of the product, however many appraisals will run in the $1,000-$1,500 range.
Very few, if any, commercial loans offer zero points. Depending on the size and complexity of the transaction may dance will charge between 1% to 3% of the loan.
Commercial Real Estate on Long Beach Island
Commercial real estate is more challenging than residential real estate, and it is important to work with an agent who has experience in the commercial field. Unlike a traditional residential transaction on Long Beach Island, it is important to understand the effect a short season will have at it is equally important to be realistic about the expectations of a business. For more information about the commercial real estate market on Long Beach Island, contact me and I will respond right away.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
www.BuyLBI.com
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