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Are commercial loan rates different than residential rates?

Yes, a lot different. The Federal Government has laws for Residential and Commercial Lenders. There are a lot of residential lenders and few commercial lenders, which are usually larger banks. Residences are easy to sell, commercial property is hard to sell. There are many times more homes than businesses. Businesses have a tendency to fail

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Can I get more than 1% return with commercial property?

Yes. It depends… Tax advantages are one of the positive benefits of real estate investing, even though the dollar return is not always great. There are some types of commercial property that don’t return any money until they are sold, like vacant land. This is more speculation as you anticipate an increase in return with

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Why is commercial property such a good investment?

A. Because it often has a great dollar return, as one property listed with RMLS that returns 7%+ with the security of everlasting land, unlike an investment in a bank savings account returning 1%+/-. Why doesn’t everyone invest in commercial property instead of putting their money in a bank at 1%+/-? There are several reasons.

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What is leverage and why is it good?

Leverage is good in most cases because it allows you to buy a bigger piece of property than you would be able to buy with 100% cash. Leverage allows you to purchase a more expensive piece of property with you paying part and borrowing the rest. Say you wanted to buy a house as an

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Can I use my home for commercial business purposes?

Yes….and no, it depends. Your home may be used for commercial business purposes under certain conditions. The City of Roseburg is a little more strict than Douglas County. So much depends upon the type of business you are planning. In the past, many physicians, dentists, real estate brokers and insurance salesmen worked from their home

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Besides CAP rate, what other methods can we use to evaluate a business?

There are many ways to evaluate a business. A bank or lender might evaluate the business a little differently than you might. The bank or lender usually has a complicated computer program. We have several simple formulas to quickly give us an answer, like GRM, Gross, Cash on Cash, IRR (internal Rate of Return), ROI

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What’s this CAP rate everyone is talking about?

Why is it important? CAP rate is one measure of property performance. It is the NOI (net operating income) divided by the value or cost of the property. Net operating income is the total gross income less operating expenses. It does not include Debt Servicing Payments nor Taxes. It is only one measure of a

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What is commercial real estate?

There are many types of income producing property and we will cover each one individually later on. Multifamily, office, light and heavy industrial, retail, land, agriculture, hotel/motel, senior housing, health care, business opportunity (no land), church, income, live/work, manufacturing, mobile home/RV park, recreational. As you can see, there are may types of “Commercial” property. We

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