Mixed use properties did see considerable investor interest in the earlier part of this decade, and now that we are slowly crawling out of the tough fiscal times, there is renewed interest in this sphere. So, if you, as an investor, are looking at buying a mixed used property, you might just have a good thing going. The most important thing that you need to know at the onset though is that even though these properties come with the ?residential? aspect, owing to the ?commercial? aspect you would have to look at commercial lending options.?
What?s Mixed Use Property?
Very simply put, any property that consists of residential units along with commercial space comes under this category. This would include properties that house offices, shops, apartments, etc. Renters/owners of such properties would include people who wish to remain within the same property when it comes to work and living. An example in case would be a grocer who runs a shop and lives in the same complex/building.??
The Evaluation:
As with any other investment, it is pertinent that you evaluate the strengths and weaknesses of the property you wish to invest in. and since such a property involves both the residential and commercial aspects, these would have you studying the property?s residential and commercial tenants. The viability of the investment in such scenarios would depend on both these aspects, and even if one of the facets seems promising, the one that does not could make the investment to turn sour. If the evaluation stage tells you to go ahead, you would then have to consider the financing options, and do understand that the property?s tenant mix and other characteristics would have an effect on the financing options that are available.?
Commercial Loans for Mixed Use Properties:
You do have various options when it comes to looking for mixed use commercial loans, and these include conventional lenders as well as private financing. Depending on the loan amount, you would either need to apply for a large balance mixed used property loan or a small balance mixed use property loan. In either case, do expect to fork-out around 25% of the investment as down-payment (unless you?re looking at SBA financing, wherein this could come down to 10%). Investors looking at options that do not require income documentation can think of stated income commercial loans, and if time is of the essence, then private financing can be a good option. When it comes to private financing, do know that such financing can also be used to construct, develop, and refurbish a property, and can also be used in foreclosure and bankruptcy scenarios.?
Also, while mixed use properties might require lenders to devote extra time and resources, lenders do realize that this segment does fill an important niche. Lenders understand that there is a demand for such properties, and if a project is economically viable, there is no reason why you should not be able to find suitable financing.?
City Capital Finance offers its expertise in helping investors look for the right kind of commercial loan for mixed use properties, and this includes conventional lending, private financing, as well as SBA loans.
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