Law Office of Ryan S. Shipp, PLLC

Avoiding mistakes when purchasing commercial real estate

Prospective buyers of Florida commercial real estate may run into some common problems with getting their transactions approved by prospective lenders. People should be aware of these issues and take the time to fix them in advance.

Some prospective buyers do not understand that banks do not see them in the same way that they see themselves. Banks care less about what people do for a career as much as what they look like on paper. If the prospective buyers have some credit problems such as several late payments, charge-offs, bankruptcies or tax liens, they are unlikely to be approved regardless of what types of positions they hold. This makes it important for people to check their credit and to take steps to correct any problems that they have.

Businesses that are less than three years old may also run into problems with securing commercial mortgages. Banks want to see that newer businesses have been profitable for at least two of the last three years before they are willing to extend loans. It is also important that prospective buyers have the sufficient cash to support their purchases and do not try to over-leverage themselves.

People who are interested in purchasing commercial real estate should be patient. It is important that they take the time to check their credit and make certain that they have the sufficient cash flow to gain approval. Buyers should also conduct due diligence on any property that they are considering. Making certain that the property is free of liens and other liabilities is important. An experienced attorney may help by conducting market analyses, requesting documents and researching the property's title records to make certain that a potential purchase is a good choice for a client.

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Law Office of Ryan S. Shipp, PLLC | 814 W. Lantana Rd., Suite 1 | Lantana, Florida 33462 | Phone: (561) 699-0399 | Map & Directions