A semi-commercial building is characterized by the fact that a commercial portion is accompanied by a number of residential apartments. The financing of semi-commercial income properties in Montreal, Laval and all across the province is based on the assessment of economic value but must also take into account several other important aspects:
The location of the building
Type of the tenants
The duration of lease
The type of unit (5 1/2, 4 1/2, 3 1/2 ...)
The type of commercial leases in force (gross, net or triple net)
The number of years that tenants occupy the unit
The average vacancy rate of the building
The physical conditions of the building
Your management experience
The number of parking spaces available
The percentage of funding varies by the financial institution and can range from 65% to 85%- the lower of the cost or the economic value
The possible amortization varies between 15 and 25 years, depending on the risk and the quality of the leases
The documents required by financial institutions are usually:
Your personal financial information
Your corporate financial statements
The purchase offer and the annexes
Confirmation by appraisal report of your down payment (less than 2 years old)
A phase 1 environmental assessment of less than 3 years (depending on loan amount and risk)
An inspection report (sometimes required)
A structural report (sometimes required for buildings in poorer physical condition)
The history of renovations to the building
The rent role
Copies of leases and renewals
A statement of income and expenses of the building
The municipal and school tax statement
The annual statement of energy expenses assumed by the owner
Copy of the building insurance policy
A certificate of location less than 10 years old
Regarding the interest rate, you can choose a term varying between 1 year and 10 years. The rate for this type of financing is not displayed by banks. It will be defined according to the risks incurred by the financial institution based on the information provided.
The bank will also charge an application fee and possibly an annual review fee, which we will negotiate for you.