Buying an office condo - Posted by Richard

import · February 27, 2005, 10:11am

Posted by Richard on February 28, 2005 at 18:35:28:

That is how it is.
BTW I was wrong.It is $130 per sq foot.
I paid a $1000 reservation fee today which will apply to the first 10%.
The agent today advised me I may want to talk to my banker which of course I will before I sign the purchase contract.
He also said that once I sign the contract I could lose the $ if I am not able to finance it.

import · February 27, 2005, 10:11am

Posted by Richard on February 27, 2005 at 11:11:36:

There is a large office condo going up across the street from where I currently rent my office.
Seems like a great situation.
Four buildings are going up with a total of 37,000 sq feet. I can buy a unit with 1850 sq feet. The shell price is $145 per sq foot. Then approx $35 per sq foot for the build out.
Upon contract signing I pay 10%, then when construction starts I pay another 10%.
My questions are:

Would a mtg company or bank give me 100% financing since I already paid 20% down?
It certainly sounds reasonable to me that I need to include a clause in the contract that it is subject to financing. Are there usally pernalties for these kinds of things if say financing could not be obtained and the 20% would be refunded?
Thanks

import · February 28, 2005, 11:48am

Re: Buying an office condo - Posted by carlos

Posted by carlos on February 28, 2005 at 12:48:33:

Richard,

I thought I had posted you a reply, but don’t see it. Anyhow, what I said was that I am developing an industrial condo, and my deal to buyers is as follows: sign the contract and put up 2.5% of the price. You then have 30 days to get your financing lined up, and you can back out of the deal during that time and get your money back. After 30 days the deposit “goes hard”, and is non-refundable. A further 2.5% is due when we start construction, and that is non-refundable also (no 30-days on it). When the building is finished, we go to closing and you pay the other 95%.

20% down sounds way too high to me. As others have said, you might be able to do it for nothing down, but that depends on your market. In my market, that won’t fly, but 20% seems excessive.

=Carlos=

import · February 28, 2005, 10:02am

Re: Buying an office condo - Posted by Commercial Investor

Posted by Commercial Investor on February 28, 2005 at 11:02:48:

Why are you paying 20% without a mortgage? I am buying a brand new office condo and I have given the seller no money. It is $155/sq.ft. for shell and $35/sq.ft. for build out. You shouldn’t have to pay anything until you close on the property at which time you get a mortgage and put up your down payment. What state are you located in?

import · February 27, 2005, 4:52pm

Re: Buying an office condo - Posted by chet

Posted by chet on February 27, 2005 at 17:52:11:

run this by a good re atty. to me having to put up 20 ON SPEC SOUNDS high.

check out SBA loan is you can’t get financing.

import · February 28, 2005, 5:38pm

Re: Buying an office condo - Posted by Richard

Posted by Richard on February 28, 2005 at 18:38:58:

20% is the deal.
They have 22 of the 27 units already reserved.
We are in an area where there is little if any smaller office sized commercial properties available for purchase.
That may be why they can ask for those terms.
This is just for medical professionals.