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» Seasoning Commercial Property

Posted on 8/25/2005

Hard money lenders make loans based on the quick-sale value of real estate properties. They look at the most recent sale of the property, including when it was sold, how much it was sold for, extenuatign circumstances that may have altered the price, etc. If you bought commercial property a few months ago and claim a value significantly higher than the price you paid for it, be prepared to account for the dramatic increase in value. Reasons why your property may have increased in value in a short time include:

  • renovation of the property is now complete or nearly complete
  • the property was fallow and is now occupied
  • the property is now generating income where it was not before
  • the income on the property has increased significantly
  • the property has permits, zoning or other entitlements it did not have when you bought it

If your property has increased in value, show the lender how and why. This will support your valuation and help you get funded.

Posted in Miscellaneous