DO you want to purchase commercial real estate?

Retail real estate is property that has been designated as retail use only.  Main Street USA to the major shopping centers of America normally fall into this category.

Industrial properties encompass a broader category that includes warehouses but also other types of industrial facilities.  They can include manufacturing plants, research and development facilities, data centers, flex spaces, self-storage facilities, and more. 

Office space comes in all shapes and sizes.  From a single unit stand alone building. a du-plex, to an office condo inside a multi-story sky scraper.  

For the most part, when someone says hospitality real estate, they are referring to buildings designed to accommodate lodging or a restaurant.  However, there are other properties that fall within this category.

A Special "Purpose" or Special "Use" property, in which the construction of the property was designed and built for specific use in mind and it would take a major investment to repurpose the property.  For example, gas stations and service centers, assisted living facilities, marinas, golf courses, and funeral homes.

Nealy every bank in the US will lend money to purchase commercial real estate to a qualified borrower.  You can expect to be required to put in 25% of the cost into the transaction from your own cash.  Also, the amortization is normally limited to 20 years with a 5 year balloon.  Which means after 5 years you will have to be reapproved by the bank for the loan, pay closing costs again, and receive a new, and most likely different, interest rate.

With the SBA 7(a) loan you can finance up to 90%, even sometimes 100% of the cost of the property depending on the final lender.  The amortization is up to 25 years.  The SBA 7(a) loan allows for a lower down payment and longer amortization, giving the borrower more flexible terms.  The SBA 7(a) loan does not have a balloon feature so you only have to get approved once and close your loan once.  The SBA 7(a) Loan caps out at $5,000,000.

With the SBA 504 loan, the borrower can finance up to 90% of the costs of the property.  The amortization is up to 30 years.  The 504 is a more complex loan product than the SBA 7(a) and comes with a more costly pre-payment penalty.   A lot of banks will use the SBA 504 loan product for deals up to $15,000,000 or even higher on a case by case basis.

The USDA B&I loan is a US government guaranteed loan product similar to the SBA products.  Two important differences are 1. The subject property must be located in an eligible USDA area.  2. The USDA B&I loan will finance non-owner occupied commercial investment property, while the SBA loan products will not.  Most banks will finance the USDA B&I loan up to $20,000,000 but some do less and others will go higher.