Recently, I have been researching along commercial investment lines. The types of property I have been looking at are the 200K price and the rental yields vary around 6.5% to 8.5%. However, financing on Commercials requires a 60% to 70% LVR and I am attempting to achieve a minimal “my own capital down policy”.
Vendor finance the 30% + closing costs is one option.
Mezzanine finance could be another, but can be risky.
Has anyone have any thoughts?Probably the cheapest way to finance a commercial property is by not taking it as security, but instead using current equity on properties by taking out a loan for ‘investment purposes’ at residential rates.
Your strategy does not sound like this will ever be possible – I’m sure someone can give you advice regarding the other types of financing.
Don’t forget the GST!
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