Lenght of Commerical loan

[Scoby]

Hi, I am currently looking at making an investment in a commercial property. I have a number of conditions, namely Blue chip tenant, circa 8%-10% return on investment and in excess of 8 year remaining on lease (with no break clauses). As far as I can understanding bank will not lend beyond 70% of the total & given the amount I am putting in personally this is not a limiting factor. My question is does anyone know what is the max duration banks are prepared to lend on a commercial loan e.g. can a 10year loan be got if say there is 15 year left on a lease (with no break clauses)?? Any help would be greatly appreciated.

 

[Steven Barrett]

Is that 8% - 10% return per annum or over the term? Who is going to give you those guarantees and what recourse do you have if they aren't met?

If you are getting a commercial loan, why don't you ask the bank manager how long they will give you? Or is it, a geared property investment? If it is the latter, do all your research before paying over your money. Gearing can suck the life out of your investment. For gearing of 3:1, a 10% fall in value will knock 40% off the value of your investment.


Steven
www.bluewaterfp.ie

 

[44brendan]

banks are currently retecient in lending for purposes of property investment, on a stand alone basis. Talk to your own bank manager first who can give you a quick answer on the broad bank appetite for such a deal!