COMMERCIAL zoned duplex: buy or problematic/not recommended zoning for a duplex?

[Nir]

Hi All,

I was wondering if you see purchasing a duplex zoned COMMERCIAL as a disadvantage compared to purchasing a residential zoned duplex due to the fact that it will be more difficult to sell commercial zoned duplex in the future as there will be less potential buyers due to worse financing conditions for commerical properties? Is this a valid point or should not be a major issue?

THANKS.

 

[PeterKinchMortgageTeam]

QUOTE (investmart @ May 29 2008, 06:04 PM) Hi All,

I was wondering if you see purchasing a duplex zoned COMMERCIAL as a disadvantage compared to purchasing a residential zoned duplex due to the fact that it will be more difficult to sell commercial zoned duplex in the future as there will be less potential buyers due to worse financing conditions for commerical properties? Is this a valid point or should not be a major issue?

THANKS.


These types of properties are notoriously hard to finance as neither residential nor commerical lenders are interested. You`ll wind up with a subprime loan with very little flexibility. Its important to work those additional costs into your calculations when looking at your cashflow or evaluating it as an investment.

 

[Nir]

Hello Peter,

I can always add a condition "the offer is subject to financing satisfactory to the buyer..". and if I am unable to receive RESIDENTIAL financing conditions, cancel the deal. so at the buying stage the zoning, for me, is not an issue – I can simply decide not to purchase the property unless I am able somehow to get residential financing conditions..

What I meant to ask is is it SIGNIFICANTLY more difficult to SELL such properties duplexes or triplexes zoned commercial? and is this (the difficulty in selling such properties in the future) by itself a good reason not to buy? (Assuming except the zoning issue, it`s a nice positive cash flow property in an area in transition.)

Thanks & Regards,
Neil

 

[realfortin]

QUOTE (CanadianMortgageTeam @ May 29 2008, 09:11 PM) These types of properties are notoriously hard to finance as neither residential nor commerical lenders are interested. You`ll wind up with a subprime loan with very little flexibility. Its important to work those additional costs into your calculations when looking at your cashflow or evaluating it as an investment.

What about as a conventional mortgage with 20-25% down? Is that easier to obtain on a commercial property with good interest rates?

 

[Thomas Beyer]

QUOTE (investmart @ May 29 2008, 07:04 PM) Hi All,

I was wondering if you see purchasing a duplex zoned COMMERCIAL as a disadvantage compared to purchasing a residential zoned duplex due to the fact that it will be more difficult to sell commercial zoned duplex in the future as there will be less potential buyers due to worse financing conditions for commerical properties? Is this a valid point or should not be a major issue?

THANKS.

usually commercial has MORE value than residential ..

and usually an existing building is grandfathered .. so if it is a LEGAL duplex to line in (it may not !!) I do not see a reason why this should be a problem !

what is around the building ? industrial wasteland ? nice neighborhood ?

it may be worth a LOT MORE if rebuilt as a strip mall or duplex commercial building, say restaurant + mini shopping centre !

did you phone the city what is allowed here ? What is highest and best use ? it may not be a residential duplex !