Distressed Commercial Property

Commercial properties are considered distressed primarily when the owner experiences financial trouble and is unable to pay the mortgage or other debts. Buying in this category does not necessarily mean there is something wrong with the property but in some cases, properties may require restoration. In such cases, buyers who are willing to undertake to rehabilitate or reposition the property may find a unique investment opportunity.

Is Buying Commercial Foreclosures Beneficial?

Opportunities do exist in the Fort McMurray Commercial Foreclosure market and Investing in these properties can be a good strategy for investors or owner-occupiers looking to make good returns. The pathway to success in commercial real estate can be shortened by researching the commercial foreclosure market.

There are a few important guidelines on how to utilize and assess such properties and build a successful deal around them.

Access your use of the property before you decide to buy. Are you an owner-occupier or investor??
Consult with a commercial lender. There are various types of commercial real estate financing available. Do your research, and consult Lending institutions to find the best financing option that’s available to suit your requirements.
Assess the Risks of Purchasing the Property. Buying a piece of foreclosed real estate can often come with some additional risks and setbacks that you would not face during a traditional real estate purchase. It is important to be thorough in the due diligence process.
Conduct a property inspection, environmental study, appraisal, and condominium document review as required and investigate to understand any unpaid property taxes or condominium fees and whether the sale is subject to the buyer taking on these fees.
Obtain professional quotes for any remediation or improvements you may require for your use.
In short leave no stone unturned in assessing the property's condition and any future costs. Your Lore Group Commercial Advisor can assist you with all of the important due diligence.
Understand the type of foreclosure you are purchasing and the process that might be involved. The Commercial foreclosure market appears in a variety of forms. This means before you begin buying real estate, you need to understand what types of foreclosure deals exist.
In Canada, there are two types of foreclosures, Judicial Sale and Power of Sale.
- A Judicial Sale involves court processes before a lender takes possession of the property whereas in Power of Sale, through a clause in the mortgage contract, the lender has the power to sell the property after the default of mortgage payments. There are also Government-Owned Properties.
- Government-Foreclosed Real Estate is very similar to bank-owned properties, but instead of being owned by the lender, the property is owned by the government. These are usually the result of owners defaulting on government-insured mortgage loans or unpaid property taxes.
Market Research - research the market and find available foreclosed properties in the area and comparable sales data. Investing in commercial foreclosures, bank sales and court-ordered sales can be a lucrative investment.

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Our Services

Property Valuation – Your Lore Group CBC professional can assess the value and condition of the property to determine its marketability.

Due Diligence – Our experienced professionals may assist you with inspections and other important gathering of financial and legal documents to assist you in ensuring the property is suitable for investment.

Repositioning – We can help you reposition a property that isn't doing well by identifying potential buyers or tenants, advising on property improvements, and negotiating lease or sale terms.

Financing Referral Services - Our commercial professionals can connect investors with lenders that specialize in financing distressed properties and assist in the loan application process.

Property Management Referral Services – A Lore Group, Coldwell Banker Commercial affiliated professional can refer you to Professional management for the property after purchase or lease.

Financial Institution/Trustee Services Valuation and Listing Services - We understand how to work with a range of stakeholders who may have different objectives and expectations, understanding the implications to both the lender and borrower, The Lore Group, Coldwell Banker Fort McMurray provides effective, tailored and proactive solutions and marketing strategies. For a reduced amount and the lender forgives the remaining debt.

FORECLOSURE AUCTION

Sometimes when an owner defaults on their mortgage loan and the lender initiates foreclosure proceedings, that commercial property may be offered for public sale in an auction. A foreclosure auction allows the lender to recoup some of the outstanding mortgage debt and may provide strong opportunities for investors to purchase the property at a discount.