If you are in the market to further your business operations by looking to purchase a commercial property, commercial foreclosures are a potential option that may be a bargain in the long run, if you know how to look for the right one.
A foreclosed property, or foreclosure, is a residential or commercial property that is seized by the lending institution when the previous owner is unable to pay off the mortgage to the property in a timely manner. In order to pay off the remaining debt of the property, the bank usually puts the properties up for auction. These properties can also go on short sale, which is when the bank agrees to sell the property for less than the full balance. Here are some handy tips to consider when you begin looking for the right commercial foreclosure for your business.
1. Research. The most important part before buying a foreclosed commercial property is to do your due diligence. Be prepared to dig through online property portals, searching for the right commercial foreclosure that fits your business and your lifestyle. If you purchase the wrong one, it could potentially lead to a financial disaster. Opt to work with a real estate agent who will be able to help you with the research and compute for how much the property costs and its ability to earn profit.
2. Show them the money. Most lending institutions will require a down payment that differentiates it from a residential foreclosure that requires little to no money down and submission of several documents as proof that you are qualified to get a commercial loan. You will have to present several documents, such as your bank statement, proofs of payment, financial records and the like.
To learn more about the commercial foreclosure process, read our next installment on more tips when buying a commercial foreclosure.