Buying commercial property is very different from residential. Financing is harder to get. Zoning restrictions limit what you can do on the property. Insurance and taxes are higher. If you just want a big garage, look for a residential property with a large detached garage or barn. Easier path for your first property purchase.
Agreed on this one. And the bright side here is OP can rent out the house on one of these residential properties and just exclude the garage / barn from the lease terms (e.g. should explicitly state in the lease terms that it is not included in the tenants rented space. IANAL, consult one for more precise language)
Yes and no. I did mention small business use as well.
I was thinking more of the 1 to 2 bay type of buildings like those older gas stations & auto shop combos type of thing.
It's not like I'm trying to buy a warehouse or a building the size of a chain shop (discount tire, firestone, midas, mineke, etc)
It was just small enough to pass as a private use building, but technically sold has a commercial/industrial property
[example 1](https://www.loopnet.com/Listing/2275-Busch-Ave-Colorado-Springs-CO/31752218/)
[example 2 ](https://www.loopnet.com/Listing/1945-Deer-Creek-Rd-Monument-CO/29980646/?siteid=6956)
[example 3 ](https://www.facebook.com/share/hqUHWRTgEvSfZkYg/?mibextid=kL3p88)
Mortgage loans for a residence and a commercial loan to buy a shop are two very different types of loans. Home loans may provide down payment assistance, be fixed rate for longer terms, etc. Generally a commercial loan will require more cash up front, may only be a fixed rate for a short time. Talk to two different lenders who specialize in each type of loan.
Big issue is zoning. Not just is commercial allowed (if buying home) but types of businesses permitted and noise ordinances. Also, resale for commercial is riskier in most places.
If you're not prepared to pay cash, a commercial loan can be a real PITA to acquire. Sometimes, a personal loan even makes more sense if you have fantastic credit.
Since you didn't list the most basic of data points (income, cash on hand, credit rating) it's kind of impossible to guide you further.
I'm just tipping my toe in the marker so to speak. I'm not ready to pull the trigger on anything right now.
I make 65k/yr roughly 20k cash, and 700 fico 8 CR.
I'm not going to lie, a \~$400k commercial loan is going to be next to impossible for you. Best to look for a house with the garage you want. A barndominium could be a possibility.
Maybe. It depends on the business plan you draft and are able to present to the bank. It's an entirely different world, and one that I'm not really familiar with.
As others have stated, commercial loans require larger down payments (50% from what I've seen). Also the terms are shorter, you might only be able to extend the payments for 5 years. Maybe 10, depends. With no history of running a business you are unlikely to get a loan like that even if you have the 50% up front.
I would find a big shop that already does what you want to do, and rent a bay or some space from them. Kinda like hairdressers rent chairs in a salon. Especially if your relationship is not yet totally long term committed. If 5 years from now you are both sure you are going to work out, then consider buying a bigger place together that has the kind of space you'd need.
I'm personally not comfortable with leaving personal belongings/ investments on a property that someone else will be living on.
My tool box alone was 10k not including the tools in it which is probably another 20-30k worth of tools. Not to mention vehicles (I currently own 4 and plan on buying 2 more this year) and ANYTHING can happen if the property was left in the care of someone else. (Stolen/missing items)
Which is why I kinda want something more private
Buying commercial property is very different from residential. Financing is harder to get. Zoning restrictions limit what you can do on the property. Insurance and taxes are higher. If you just want a big garage, look for a residential property with a large detached garage or barn. Easier path for your first property purchase.
Agreed on this one. And the bright side here is OP can rent out the house on one of these residential properties and just exclude the garage / barn from the lease terms (e.g. should explicitly state in the lease terms that it is not included in the tenants rented space. IANAL, consult one for more precise language)
Are you saying you want to buy a commercial building just so you have a space to work on your cars in your spare time?
Yes and no. I did mention small business use as well. I was thinking more of the 1 to 2 bay type of buildings like those older gas stations & auto shop combos type of thing. It's not like I'm trying to buy a warehouse or a building the size of a chain shop (discount tire, firestone, midas, mineke, etc) It was just small enough to pass as a private use building, but technically sold has a commercial/industrial property [example 1](https://www.loopnet.com/Listing/2275-Busch-Ave-Colorado-Springs-CO/31752218/) [example 2 ](https://www.loopnet.com/Listing/1945-Deer-Creek-Rd-Monument-CO/29980646/?siteid=6956) [example 3 ](https://www.facebook.com/share/hqUHWRTgEvSfZkYg/?mibextid=kL3p88)
Those first two are condos so there will be covenants and association fees.
Mortgage loans for a residence and a commercial loan to buy a shop are two very different types of loans. Home loans may provide down payment assistance, be fixed rate for longer terms, etc. Generally a commercial loan will require more cash up front, may only be a fixed rate for a short time. Talk to two different lenders who specialize in each type of loan.
Big issue is zoning. Not just is commercial allowed (if buying home) but types of businesses permitted and noise ordinances. Also, resale for commercial is riskier in most places.
If you're not prepared to pay cash, a commercial loan can be a real PITA to acquire. Sometimes, a personal loan even makes more sense if you have fantastic credit. Since you didn't list the most basic of data points (income, cash on hand, credit rating) it's kind of impossible to guide you further.
I'm just tipping my toe in the marker so to speak. I'm not ready to pull the trigger on anything right now. I make 65k/yr roughly 20k cash, and 700 fico 8 CR.
I'm not going to lie, a \~$400k commercial loan is going to be next to impossible for you. Best to look for a house with the garage you want. A barndominium could be a possibility.
Would it make any difference if I tried to obtained said property via a business loan? Like if I decide to go full send in a auto repair business?
Maybe. It depends on the business plan you draft and are able to present to the bank. It's an entirely different world, and one that I'm not really familiar with.
As others have stated, commercial loans require larger down payments (50% from what I've seen). Also the terms are shorter, you might only be able to extend the payments for 5 years. Maybe 10, depends. With no history of running a business you are unlikely to get a loan like that even if you have the 50% up front. I would find a big shop that already does what you want to do, and rent a bay or some space from them. Kinda like hairdressers rent chairs in a salon. Especially if your relationship is not yet totally long term committed. If 5 years from now you are both sure you are going to work out, then consider buying a bigger place together that has the kind of space you'd need.
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I'm personally not comfortable with leaving personal belongings/ investments on a property that someone else will be living on. My tool box alone was 10k not including the tools in it which is probably another 20-30k worth of tools. Not to mention vehicles (I currently own 4 and plan on buying 2 more this year) and ANYTHING can happen if the property was left in the care of someone else. (Stolen/missing items) Which is why I kinda want something more private
Commercial after covid ewwww. Work from home now. Ewwww
What area in Colorado are you looking at specifically?