Owner finance for commercial property -- good deal? (insurance, real estate, fees)

[kelvin moss]

i've been offered a commercial building for 5% owner financing $1,000 down $400.00 per month total sale price $50,000. building appraises for $60,000. good deal , great deal or i need to ask more questions.

[chet everett]

More questions.

If the building appraised for $60K why would anybody be willing to sell for $10K less?

[OhZone]

Why would they take less?
Because they want to sell soon.
Are you having the building, including the roof inspected for structural soundness or any damage?

Taking advantage of a seller held Mortgage is the best way to go.
Only thing you need to know about this is that many of them are short term which would leave you hunting conventional financing at the end of that time period. Usually it is 3 years at which time the whole amount would become due and payable.
If you can get them to hold it for 20 years you would be in finance heaven.
Right now 5% is good interest. They would not be getting that on CD's.
In 20 years in the real estate closing business, I have never had an occasion where the seller asked for a fee. I'm not even sure that would be legal.

[Dallas_Guy]

Expect some title charges. You need a title search, title insurance and a deed.
Some recording fees.

[SmartMoney]

If you have never owned commercial property, find someone and talked to them.

Off the top of my head, delinquency rate of tenants? How much is held in security deposits? Any county zoning issues? EPA issues? Powerlines coming in.......wow, I could go on forever.......find someone that's been down this road or find a Realtor that has handled commercial real estate (and ask for references). It can be a good thing. I have a good friend and her commercial building is her survival right now - supporting her 500K primary residential mortgage payment. (She bought the commecial property 15+ years ago).