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Posts Tagged ‘Estate Market’

Investment in Commercial Real Estate

Friday, May 21st, 2010

Everyone presently is dealing with real estate. We Buy Apartment Complexes as a main source of investment in estate business. There are a number of talks about commercial estate and most people also talk about the future boost in the estate market. There certainly is some truth in this segment and there are a number of business owners who literally do very well in the commercial real estate market. When dealing in estate it is important to try and avoid all pitfalls, so referring the past history is a very good option before making any such investment. Before the credit and economic boom, there were a number of traditional lenders who capped 65% as loans of the property value.

Earlier if you owned a $100 million commercial estate building then you could easily get $65 million as loan amount on your property. There are a number of private equity funds that targeted on such commercial estate. One of the main reasons for big and small lenders to target commercial estate was that such properties were seen as potential investment. If you have any such commercial property then you could fetch up to 80% of the loan as compared to the value of the property. Most investors also refinance their commercial estate building with an aim so they get to pocket the tax money for free.

But before you ever think of refinancing your commercial building, you have to keep in mind that these types of loans that are made against commercial properties, needs to be refinanced every 5 years. This is also one of the main reasons why most real estate financers try pulling their hands out oft eh present market. We Buy Apartment Complexes, because we get a good deal of investment from it, but if we need to refinance it after every 5 years, then it may not be considered as a good deal.

In the present scenario the entire picture of commercial estate has changed a lot. There are a number of sources that used to finance commercial estate has managed to dry out. There are also a number of financial firms that are out of their business. Today most refinance might cost you around 65% of the mortgage value. There are also a number of commercial real estate properties that have in fact lost its value. This is a circumstantial problem and the results are devastating. There are also a number of owners who find it hard to come out of the dues because of recession. So for any commercial property investor it is important to try and leave equity in their property. Most successful estate owners, avoid tapping their equity. It is also important that you try and stick to the lenders you can trust. Short term loan from lenders you don’t trust can be deadly.