Commercial Property Mortgage Broker / Lender

I understand commercial property is a different beast specially in terms of financing.

Can someone recommend mortgage broker or lender specialising in Commercial property loan and advise current prevailing rates PI VAR, IO VAR and IO Fixed ? Ideally, Lender should allow usage of rental income and equity from one commercial property to buy 2nd commercial property

I am considering investing in medical practice, child care or warehouse in near future and want to prepare myself with pre-approval before going to auctions as this will be my 1st investment in commercial space.

Thanks in advance !

 

For non specialised commercial properties (retail spaces, warehouses, offices, etc), you'll be looking at rates from as low as 2.49% and LVR can be as high as 80%. Although due to pandemic, there's low confidence on office spaces at the moment.

Specialised / purpose built commercial properties will be around 50-65% LVR.

Cross-collateralisation is possible with all lenders subject to acceptable location, asset class, and serviceability.

Rental income will always be considered for servicing. You can service on rental income only - this is called lease-doc.

Average rates for commercial property loans at the moment are around 3.5-5%. Could be lower or higher depending on your circumstances.

 

Ouuch ! So medical investment and/or child care would classify as specialised commercial properties and around 50-65% LVR and higher interest rate as well ! That’s very discouraging.

 

Depends what sort of medical investment you're referring to. If it's just a normal retail space and you fit it out for optometrists or dentists for example, that will be classified as non-specialised. Hospitals will be specialised.

Yes, unfortunately, however noble the purpose / usage of the property is, being specialised also means you're shrinking the market size should the lenders need to sell off the property for whatever reason.

 

Something like this. Will it be classified as specialised ?

Queensland Health, 11/1-17 Hershel Court, Urraween, QLD 4655 - Medical & Consulting Property For Sale - realcommercial

 

That looks like a standard industrial / office site

 

Is a freehold pub/hotel/tavern considered as a specialised building?

 

Yes, and appetite is quite low at the moment for obvious reason.

 

What sort of LVR and interest rates are possible to get on a pub/hotel investement? There is a tenant in place who runs the business and we are looking to buy the freehold building as an investemnt. The hotel have gaming liscense as well.

 

Around 50% LVR mark. Interest rate will depend on the lender and structure e.g. full doc, low doc, lease doc, etc. Rates can be low 3 to high 7

 

What sort of costs are involved in getting a loan and currently how long is the whole process taking?

 

Apart from deposit, things that you might have to pay upfront are stamp duty, valuation, legals. Establishment fee, brokerage, etc is normally deducted from the gross loan amount at settlement.

Process generally takes 2-6 weeks, depending on how quickly you can provide all the information requested and how responsive the lenders are.

 

The answer is 'it depends'