I am interested in an apartment building, however, I’ve never contacted an agent regarding a commercial property before. Is there a certain “unofficial” rule or specific steps in asking for the financial information so that the agent takes you serious and provides you with the info you asked for?
I’m asking because I want to view the financials of the building first before I take a walk through.
The world of commercial real estate is more aggressive and offers fewer protections than residential. You might want to get your own broker to help you. He’ll insulate you from the prying questions of the listing agent and should also be able to help you with your evaluation.
I assume you have a specific building in mind? There is nothing wrong with calling the listing agent yourself and requesting finances for the building. Make sure they’re actuals and not proforma.
Alternately, you could probably find the building on Loopnet. The Loopnet listing should have most of the financial info you need to do a preliminary evaluation. To access the listing details, you’ll have to sign up for a free account. It’s easy and requires interaction with no one. Who knows, you might find something better.
Good luck.
They shouldn’t have a problem giving you the financials. Sometimes the Realtors want to meet with you so they can explain everything, rather then just emailing or faxing the information. They almost always want a preapproval letter before you are allowed to walk through the property. They will not let you in the property without one.
For larger apartments they typically like to do a showing in stages. First you see a few units, and then if you’re interested then you can see all the units.
The property I’m interested in is a 21 unit and is listed on the MLS with no financial information available.
Would it seem too inexperienced to send the listing agent an email requesting the financial information? After all, they don’t have anything listed in order to make a preliminary decision…
Iron Range, when you say “preapproval letter” are you speaking in terms of a preapproval letter for financing of the property? If so, isn’t financing for commercial primarily based upon the property itself?
Yes, you can email the Realtor for the financials. I would personally call them and get the process started. Remain calm and professional on the phone, and they won’t suspect you don’t have any money. 
Just kidding.
The lender will definitely be concerned with your financials and credit. The Realtor/Owner may allow you in the property without a preapproval letter, or they may not. I wouldn’t let anyone through my properties without one. Loan officers use to handout preapproval letters out like candy. Those days are done, Brokers are realizing that they will distroy their name if they continue this practice.
Steps:
:shocked
I already sent an email requesting the financial summary…but I’ll post the results as they come. Hopefully the agent takes me serious.
Also, iron range, is it possibel to get a preapproval letter from a lender for a commercial loan if I do not have the official financial records of the property to show the lender?
Also, how could I structure/accomplish the deal if I want the seller to take back a note for the down payment even if it’s only for a year…?
Thank you for the info Iron Range.
I have another question…
The building in question is for sale at $520,000 the sellers are motivated and I’m sure that I could get them down to at least $450,000. At that price I would be acquiring the property for approx. 70% market value.
Now the problem is I only have about $30,000 cash on hand to use toward the purchase of it, so if I ask the seller to finance the down payment, how would I be able to get a preapproved letter from a lender in this situation or before I even put in an offer?
Unfortunitely you can’t have a seller finance the down pmt. If the deal is 70% not including rehab money, then a HML probably won’t touch it. Some commercial lenders will go down to 5% if the seller is willing to seller finance some of it.
If the seller is motivated, then I might try and do seller financing with 5% down. Have a balloon pmt so the seller gets all their money and after 1 year. Then you can just refy at a 70% loan. Everyone wins, the seller gets all their money within a year, and you get a nice property.