Professional => The Boardroom => Topic started by: on December 16, 2019, 05:29:26 PM

Title: Buying a building
Post by: on December 16, 2019, 05:29:26 PM
The commercial loan broker inspects your P&L, bank statements, and account history.  You're approved for a $750,000 loan.  You need 20% down.

Your $250k home is paid off.  Would you borrow $150,000 against your home to buy a commercial building?
Title: Re: Buying a building
Post by: Misadventure Gear on December 17, 2019, 02:56:27 PM
Assuming I was completely confident in my ability to make the payments, I might (don't want to risk my home). Paying your own mortgage is always better than paying someone else's.  Normally commercial real estate is a good investment, but I see a LOT of vacant commercial real estate around my island. I also see them building a whole lot more commercial buildings..... Frankly I think the rush to build is a bit excessive. It might be cheaper to buy an existing building, then to construct from scratch. On the other hand, if you already owned the land, building new might make more sense.
Title: Re: Buying a building
Post by: stimpy on December 22, 2019, 12:06:50 PM
Yes, in 99% of the cases, real estate is money. And the longer you hold on, the more it's worth. I turned a 100.000€ home into a 265000€ home with 70.000€ investment. That's 95.000 € profit in 4 years. I then sold it. And reinvested in a 340.000€ property, wich is now worth around 420.000 € 3 years later.

I am still broke as f*** with only a couple thousands in savings. But if shit really hits the fan. I could sell my house. And live in a small appartment thats all payed off.

However, thisbis very specific to your region. And this is Europe i am talking  about. However, in general. Real estate will make you more money then interest ôa savings account
Title: Re: Buying a building
Post by: SunriseTacticalGear on December 23, 2019, 08:56:54 PM
In my opinion, It really depends if you need the space to be more productive, or are you trying to increase your assets.
Also, would the increased productivity pay for the interest payments, and more?
Do you want to continue to chase the pains that come with growth?
If you would like to make the commitment, I have seen good luck with people building or buying a large facility, and renting out half while using the other half.
Good luck on whatever decision you make.
Title: Re: Buying a building
Post by: Corvus on January 21, 2020, 03:11:49 PM
I would consider it. It would depend on the market and my confidence in repaying the debt. Where I am commercial space is extremely limited (read non-existent) either to rent or buy. If something came available that met my needs, I would work every angle I could to make it happen. I do think the rental of part of the facility would ease some stress in the beginning and allow for scaled growth.
Title: Re: Buying a building
Post by: Gear Dynamics on January 22, 2020, 09:39:14 AM
If you’re talking about that kind of money, I’d sooner sell the house buy a larger property with a new house and build a shop. The upside is that you’d own the land, no strata fees, taxes would be cheaper and you could basically build exactly what you want. The downside is that it doesn’t lend itself to a retail storefront, if you even want that. You also don’t have to commute to work...which is good and bad, but will save you gas money.