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Comment by Ross Wolf
Entered on:
Cutting your home’s selling price 7.1% is no big deal when you consider landlords of commercial retail property are now slashing their selling price 50-60%. A retail tenant now paying e.g., $2,800 a month to rent a retail building and land that costs $400,000 ten years ago can buy that property for $175,0000-$200,000 and pay just $1,500 a month in loan payments 100% financing to purchase the property. Things have turned upside-down. Most Landlords that ten years ago paid $400,000 for a retail commercial property got a 50% purchase loan ($200,000). When tenants leave, don’t extend their lease, landlords can’t find a tenant who will pay the prior amount of rent; exponentially landlords are defaulting. Making matters worse, after a commercial property landlord loses his or her property to foreclosure, the owner will have to pay a 25% federal tax on all straight-line deprecation taken prior. After the November elections the situation is expected to worsen.  Commercial brokers are now attending classes that instruct agents how to deal with lenders in short sales of commercial properties similar to home short sales after foreclosure.

 

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