How To Purchase Commercial Real Estate-----Part 1

After a somewhat sabbatical leave from blogging due to illness and matters of time-consuming importance, some of which were with Godaddy (I’ll cover them in the future with suggestions for anyone else that may have encountered similar issues), I received a number of emails asking for more info on SBA and especially the much obscured 504 Program and the extent of koH Resources’ participation. So after a month rest and much thought, here we go again.

 

But before I get started, I would like to thank Pam Slim for her helpful hints and congratulate her on her newly released book, Escape from Cubicle Nation, which is also the title of her blog. She and a few others have been very helpful in both my blog-writing and taking koH Resources Inc to another level (I will outline the “others” in the future).

And so we begin: owners of small and mid-sized businesses can preserve capital and maximize cash flow to better afford purchasing commercial real estate instead of leasing with the 504 Loan Program. You receive all the benefits of ordinary bank financing but with less money down, longer fixed rate termsand below market interest rates. The three conditions that we can all agree upon.

  • Get 90% financing of the total project costs to preserve more capital.
  • Own an appreciable asset while lowering current real estate expenses up to 40% instead of leasing.
  • Receive up to 25-year fully amortizing terms to lessen the impact on cash flow.
  • Obtain below-market, long-term fixed interest rates.

    And here’s an unexpected bonus: the Program also allows the financing of closing costs and other normally out-of-pocket fees to be financed as part of the loan amount. Better yet, on top of all of this is a boon to the business owner who may eventually sell: the loan is assumable! I will have further specifics about the SBA 504 Loan Program, a better way to purchase commercial real estate, in subsequent posts without interruption of other topics.