Deposit

Viewing 5 posts - 1 through 5 (of 5 total)

Garvo
Participant
@garvo
Join Date: 2004
Post Count: 8
January 28, 2009 - 3:09 am
Hi all.
I have never invested in commercial property before and need a little help.
I want to purchase a commercial property for $750k. Part of the shed is currently
tennanted and the other half I want to move my automotive business into.
It is in a great location and is at a good price. making payments isn't a problem because
my business is already making high rent payments where it is. My problem is the 30% deposit.
I only have around $40k spare at the moment. I have asked the seller about vendor finance which
they aren't interested in. My question is does anyone know of a lender that would accept say a 5%
deposit ? or does anyone know of any other way around the high depsoit required.
or it may be the case that I have some serious saving to do before getting into commercial.
thanks for any help.
Mark
IP Freely
Member
@ip-freely
Join Date: 2008
Post Count: 353
January 28, 2009 - 8:03 am
You don't mention whether you have any other assets which can be mortgaged – if you do, you may consider either drawing down some of the capital against the other property (via a line of credit) or (heaven forbid) cross-collateralising the loan (ie tying the two properties on the one loan).
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
January 28, 2009 - 9:12 am
30% deposit is the norm with commercial I'm afraid.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Garvo
Participant
@garvo
Join Date: 2004
Post Count: 8
January 28, 2009 - 11:10 am
I don't have enough equity to make it worth trying to get a line of credit. I think I will just have to wait it out.
If it doesn't sell they might get a bit more negotiable with the terms and in the mean time I will work at getting a deposit.
thanks for the prompt reply's. I didn't think there would be a way around it but thought I would ask just in case.
PosEnterprises
Member
@posenterprises
Join Date: 2006
Post Count: 290
February 11, 2009 - 2:00 am
Is it worth waiting until you have a few resi properties under your belt before venturing into Commercial property.
What are the risks with commercial – What if the tenant can't pay and you have a vacant shop or office for 6-12months you would have to cover these costs with your equity.
Does the tenant pay for all the outgoings including rent. The owner just has to pay the Interest is that correct?