I came across a possible buyer for small retail center a couple weeks ago. They own 3 fast-food type of japanese restaurnats and looking to expand their business. They want to buy a commericial property with 2 or 3 tenants and using one of the spaces for their use.

Now i've only been in a leasing transactions before and this could be my first buyer rep. i want to get together with the key people and explain the process from beginning to end but without much experience, i don't know what to say.
Right now im in between brokerage and currently talking with colliers to join the team. however, the hiring process takes much longer with big houses.
i know that im going to wait until i get placed in the company and have one of the veterans or whoever im teaming up with to help me with the transaction.

It's been almost 3 weeks since i've talked with the buyer and i get the feeling that im going to have to wait another 2 weeks for colliers set up everything for me. i would like to keep in touch with the client and explain the situation and possibly have them ready for the next step.

now, how is the buying process start and what are some steps that need to be followed and how does it end?

what i have found out from my research is that loan process is critical in buying a comm. property and it's improtant to have the buyer start the loan process earliest possible. now the bank or commercial lender make their decision on many factors but one thing is that they would like to have the property located first and consider other factors like type of tenants and what kind of lease and etc... along with the located property.

can someone with good experience tell me what to watch out for and explain the steps needed to complete the transaction?

thanks and always appreciate the input!

You can't fit all that on here.Sounds like they want a class B or C location on a good corner. If the owner will self-finance you won't need a bank. Sometimes a lender will let a new buyer take over the note if they qualify and the lender feels good about it.

For regular financing it will be tough as they want huge chunks of money down now to get a loan. First step is locate the property then find out about finance options and what are the goals of the buyer to get a match.

thanks for replying, Super!
what are the financing options i can laid out for them?

Once again it depends on the property.

You might have a strip center valued previously at 2,000,000 where a down payment of 200,000 was used. That left a note of 1,800,000. Since that time the economy has gotten tough and rents have been flat and a few tenants have left the building. Your buyer wants to purchase using conventional means. A new appraisal with the income approach shows a current value of 1,600,000 and the lender wants 40 percent down.

Your buyer would have to come up with a 640,000 payment plus payoff the balance leftover on the original note. This scenario just won't work.

Instead you could get the owner to finance if it was paid off or get their lender to agree to move the note to your buyer. They would obviously want to qualify them. This is much better than the lender having to foreclose as no buyers can come up with the downpayment.

This is just one scenario there are many. I would get their specific goals down then find 2 or 3 ideal properties. Then you need to see if finance options are realistic before going to deep with it.

Professional buyers and developers have a system to weed out quickly properties that are not fits for their criteria OR do not have the financing possibilities they need to do a deal.

You didn't state if this property was anchored or not, but if it isn't you can expect a lender to want a minimum of 35% down, providing it debt services at 65%LTV. If not, they will have to put down an amount until it has a DSCR of at least 1.2-1.25
Also, the leases must be good for at least the period of the loan amount, which in this case would most likely be for 5 years.

That being the case, Super Realtor made a good point that the buyers may want to aggressively pursue seller financing.
Not to be a pessimist, but these properties are not exactly desirable due to the high fallout of tenants in this economy so lenders are pretty fickle when it comes to lending on them.

If you approach a lender be sure to have the current rent role, copy of the lease agreements, 3 years financials, and YTD P&L, PFS for your client, their credit report, a one page executive summary, and their resume in hand as that will give a lender a good picture of the property and the buyers. Pictures of the building wouldn't hurt either.