Commercial Foreclosures

Commercial Foreclosures

Definition

Similar to residential foreclosures, these properties are commercially-owned by businesses that go bankrupt or default on their payments. They are then repossessed by the lender and sold at auction.

Commercial Foreclosures

Commercial Foreclosure

Commercial foreclosures are an often overlooked area by real estate buyers and investors. So many people are focused on the single-family, residential foreclosure market that they don't realize the huge profitability that can come along with investing in commercial property foreclosures. Buying houses can certainly be a lucrative way to make profits, but the commercial arena offers larger profit potential than most people realize.

Make Money Investing in Commercial Foreclosures?

So how do you go about making money by investing in commercial foreclosures for sale? There are numerous different ways that you can go about doing this. The first thing you need to focus on is finding the right kinds of properties. Commercial properties can be anything from multifamily homes to high-rise apartment buildings to retail store fronts.

An example of a commercial property foreclosure could be a lease situation. For instance, if someone owns a retail strip mall, they could experience a foreclosure if their tenants fail to pay the monthly lease payments. As the economy has fluctuated over the last several years, many commercial property owners have found themselves in this kind of a predicament. When tenants don't pay, the underlying mortgage often doesn't get paid either. When this happens, the borrower can find themselves facing a foreclosure.

If you want to find and buy commercial properties for sale, you have to know where to locate these real estate bargains. These properties can go into foreclosure when a business or borrower defaults on their commercial mortgage loan. They tend to be very high value properties that have a great potential for monthly income. However, it makes sense that experienced investors or those who have a lot of financial backing focus on finding commercial foreclosure properties while newbie investors may want to start out in the residential market to get more experience before diving into commercial properties.

Hottest Commercial Foreclosure Market

It's hard to say where the hottest commercial foreclosure market is at any given time. Anywhere across the United States will have its own supply of commercial foreclosure listings simply because of the change in the economic environment recently. You will also find commercial foreclosure homes such as multifamily units. This could include things such as townhome complexes, apartment complexes, quadraplexes and other types of commercial foreclosed homes that meet the criteria.

When most people are referring to commercial foreclosures, they're usually talking about things such as office buildings, retail shops and other types of non-residential real estate. Again, you're looking for an opportunity to purchase a property that will give you a good return on your investment either through monthly leasing to businesses or individuals, or for a fast flip profit.

When we're talking about foreclosure commercial opportunities, it's important to remember that the lender really does not want to get stuck with the property in most cases. They already have enough bank owned homes to deal with. Owning a very large commercial property brings a lot of liability and cost. Not only do they have to worry about the maintenance of the property, but they also have to hire property managers that can make sure that the property is safe and free from vandalism, among other things. Banks are not typically in the property management business, so they see the properties as liabilities on their balance sheet.

The trick with real estate foreclosures, whether residential or commercial, is to make sure that you act quickly when you find a good deal. There are hundreds, if not thousands, of other savvy investors in your marketplace who are searching for the same types of properties. Finding the best deals early will give you more opportunities to swoop in and grab some cash.

You may be able to find government foreclosure listings that include commercial properties. A bank foreclosure listing will depend upon the type of loan that was done at the beginning. Some lenders and programs will be easier to work with than others. Many commercial properties are purchasing using jumbo loans or private financing.

One way to find these kinds of leads is by creating relationships at your local real estate investor's association and with banks and lenders in your area of interest. You may also be able to find an experienced commercial real estate agent or broker who has the inside track on properties before they are listed for sale on the market.

You need to understand the foreclosure laws and regulations in your state so that you will also know where to look for properties that are being listed in the legal newspaper before they got for auction or to the sheriff's sale. By keeping your eyes peeled for these opportunities, you will give yourself the chance to scope them out and make offers before your competition has a chance to do the same.

How Does ForeclosureDeals.com Help You Invest in Commercial Foreclosures?

Instead of spending your time scouring the newspapers and networking with dozens of people, hoping that they will give you leads, you can also do your research in one place. ForeclosureDeals.com puts all kinds of foreclosures in one easy to find location. Simply do a search for the type of property and area that you're interested in. You will be given all kinds of information on the properties so that you can contact the right person and make your offer quickly, thus eliminating your competition.

When it comes to buying commercial foreclosures, many people are scared of the big numbers and even bigger opportunity available for profit. While smaller, less experienced investors are focused on inexpensive residential single-family properties, you can start making big profits by focusing your attention on the commercial market. Being ready and able to jump out there and make offers will be the key to your success. Make sure that you have your financing in place before you start looking at any kind of foreclosure property, whether residential or commercial. This will give you a leg up on your competition who may not have all of their financing in order before they start looking at property.

FAQ about Commercial Foreclosures

  • The time for move out varies, depending on the property owner. In theory, eviction orders could come just a few days after the property sells at auction.

Go to the Foreclosures FAQ page

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