Figuring out how to buy a commercial property in foreclosure and make money of it seems like one of those mysteries that require a password and a secret handshake in order to solve. You know people do it — you just don’t know how they do it.
In some respects, buying a commercial property in foreclosure is like buying any other piece of property — it’s just that you’re dealing with a bank instead of a person on the other side of the negotiation table.
If you keep in mind that banks have different motivating factors than people that will encourage them to sell, you’ll find the whole process becomes less difficult to follow.
Here are some tips to help you come out on top:
1. Remember that the time of the year may influence a bank’s desire to offload a property.
Banks are looking at their overall bottom lines — not just the particular bottom line with the property you want to buy.
Consider timing your negotiations toward the end of the bank’s fiscal quarter or end of its fiscal year (which is even better). Banks are more likely to be interested in offloading a nonperforming property at those times because each property they’re holding is a liability they have to show.
2. Don’t wait until something is advertised.
A huge part of the mystery surrounding foreclosed properties — both residential and commercial — is tied to how people find out about them and when they’re available for sale.
This is where it really pays to be your own detective and dig into every real estate or legal database you can access. You can also go through your connections at your own bank to start making some headway into the world of foreclosure property listings. You can even seek advice from someone with experience handling business foreclosures.
3. Make sure that the property really has value for you.
Don’t jump on a deal just because the property is going for pennies on the dollar. Take the time to look over its location, structure, zoning and any other issues that could affect its ability to be a good fit for your plans.
Before you sign any agreement to purchase or even make an offer, it’s best to seek legal advice of your own to make certain that you’re really making a wise investment.
Source: www.americanexpress.com, “5 Tips For Buying A Commercial Short Sale Or Foreclosure,” Margie Fishman, accessed Dec. 06, 2017