Topic: Commercial Real Estate (
Post your comment)
Here are the latest comments from our readers about Commercial Real Estate
Read them all and submit your own comments
by Brokers Tips on 7/27
If you want to become a great commercial real estate broker then you shoule focus on becoming an expert in income producing properties
Master all the techniques for increasing after tax cash flow
If you own or invest in commercial real estate or are thinking about buying or investing in a commercial real estate property such as an apartment building, an office building or a storefront, then we invite you to discuss it here
If you are a commercial real estate proffessional then perhaps you can take a minute to share a couple of do's and dont's with us.
(Reply)
by Brokers Tips on 7/27
If you plan to become a commercial real estate broker you have to prepare yourself to provide competent sercices to real estate investors.
(Reply)
by Real Estate Tips on 7/27
Commercial real estate includes but is not limited to properties used for industrial, commercial, medical or educational purposes.
(Reply)
by Ri Investor on 7/27
That's right!
if you have a two family house or a duplex it is not really considered commercial real estate
I read that somewhere, I hope some of the real estate gurus out there can tell me why not because I would think that it is an income generating property therefore commercial real estate.
(Reply)
by ileri Ogunfiditimi, replying to Ri Investor on 17-Mar-10 03:19 AM
A duplex utilized for income-producing purposes can be considered "commercial" real estate from the perspective that it is "business" real estate (non-owner occupied).
Duplexes are residential multiple family properties, just like 20, 50, and 100+ unit apartment buildings.
The use is what classifies these type of properties as "commercial" even though the asset class is residential
For example, multifamily properties having more than 5 units are considered commercial because commercial financing is generally used to secure such properties.
The asset class hasn't changed (i.e. residential) but the financing has (e.g. commercial mortgage) due to the use of the property.
That is, 5 or more unit properties are usually purchased by investors and businesspeople, not by owner-occupants.
So lenders require a commercial or "business" loan
On the contrary, lenders have decided that an owner-occupant is more likely to purchase a 2-4 unit property, in which case a residential loan is utilized.
But if an investor buys a 2-4 unit property for investment or "business" purposes, then the same financial fundamentals required to purchase a 5 or more unit building will apply (e.g. 10%-30% down payment, cash flow, positive DSCR, etc.).
So, in summary, a property's use ultimately determines whether it's commercial or not. Commercial real estate is any property that is used to produce income or related to a business activity.
(Reply)
< Previous Topic Next Topic >
View: Simple |
Summary | Expanded
As: Threaded |
Msg List
