Florida Commercial Real Estate Broker Michael Linton Discusses Deal Structuring

Florida Commercial Real Estate Broker Michael Linton Discusses Deal Structuring

Orlando Commercial Real Estate Broker Michael Linton Discusses Deal Structuring

Michael Linton
(312)612-1031

(Orlando, FL | January 2016) Florida Commercial Real Estate Broker Michael Linton Discusses Deal Structuring by Mike and Peggy Linton Managing Partners of Linton Global

$1.4 Trillion of commercial debt is coming due in the next few years and this is a huge opportunity for Florida real estate investors investors.

My name is Michael Linton and I am a Florida Commercial Real Estate Broker and Founder of Linton Global Real Estate Group. Linton Global Real Estate Group is a Fund Manager for Real Estate Income Funds.

Today I want to discuss Commercial Deal Structuring, specifically crossing the trade (or how to wholesale commercial real estate transactions). Crossing the trade is a Wall Street Industry term.

Structuring our commercial real estate deal is a 5 step process. These steps are:

  1. Identify Commercial Deals that have seller financing.
  2. Identify The Right Types of Properties
  3. Qualify The Deal with Your Criteria
  4. Structure Your Deal
  5. Qualify Your Buyers With The Proper Criteria

 

Step 1: Identify Commercial Deals that have seller financing

Downtown Orlando FloridaWhen we cross the trade, we specifically look for seller financed deals. What is an seller financed deal? I seller financed deal is a real estate transaction where an owners usually owns the asset free and clear and is “acting like a bank” by holding the financing for the new buyer. 

Instead of a bank financing the deal, the seller gives the buyer a note, or structured debt, and the the owner collects the monthly payment.

Why would an owner want to do that? The answer is to collect the monthly interest. ( look at his amortization schedule that I posted here in my post entitled Think Like A Banker …. My 2 Million Dollar Goal ) Once the seller provides seller financing, they now have an investment that continues to pay them even after they have sold the property.

You can identify commercial deals that have seller financing by searching for the following terms:

  • Owner Financing
  • Seller Finance
  • Subordinate Financing
  • Owner Will Finance
  • Terms

 

Step 2: Identify The Right Types of Properties

To identify the right type of property, you need to know what buyers are looking for. Our investors are looking for:

  • Apartment Complexes
  • Student Housing
  • Mobile/Manufactured Home Parks
  • Office Complexes

These are the properties/ opportunities that we avoid because of the over bidding potential:

  • Auctions
  • Properties with Deadlines 
  • Unmotivated sellers

 

Occupancies To Seek

 

Fully Leased
80% – 90%
Partially Leased
50% – 60%
Mostly Vacant
20% – 40%
Vacant
0%

 

Step 3: Qualify The Deal With Your Criteria

Qualify The Deal with Your Criteria

 

Step 4: Structure Your Deal

You need to make sure that the deal makes sense. 

 

Step 5: Qualify Your Buyers With The Proper Criteria

 

To be successful in Commercial Real Estate Investing, you need access to Qualified Deals, Funding, and Intellectual Capital. We at Linton Global Real Estate Group can assist you with your investment needs. 

Do you need a replacement property for your 1031 Exchange? Visit us at Florida1031.com 

 

Florida Commercial Real Estate Broker Michael Linton Discusses Deal Structuring

Next Article: What is Asset Arbitrage? By Florida Commercial Real Estate Broker Michael Linton

 

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