All you need to know about Flipping Commercial Real estate is the best way to assign your purchase contract. Continue reading to learn all about how to flip commercial real property.

This has been the most exciting moment in my 20+ years of real estate investment. A backlog of commercial properties that have over 80% pending sale, and the distressed commercial market.-Due to the high cost of loans, lenders have begun to dump commercial properties from their books. “Give Away Prices” that are vastly lower than anything I’ve even seen.

Commercial Real estate is still valuable. Everybody drives by commercial real estate. We all stop and shop, do business, and visit our dentists. Commercial Real estate is a valuable asset in our society and will be used and appreciated for many years to come. Problem is that there are too many real estate investments.-A heated real estate market led to situations in which commercial properties with viable, well-run businesses were saddled by huge loans that were no longer affordable after the downturn.

The Solution

Over the last three to four years, the answer has remained elusive. Commercial Lenders chose to give multiple extensions to their commercial property loans than foreclose. By their actions, lenders have demonstrated that they do NOT want to be able to buy commercial real property right away. Many lenders are happy to participate in a “Commercial Workout” Lenders may agree to cash payments and may modify loan terms.

The way this relates to us as investors…
You can act as a facilitator and bring all the elements together for a commercial turn. We get paid very well for our efforts. The nice thing about this is that you don’t need to own or manage anything, just put the flip together and get paid!

My favorite method of flipping commercial real estate in today’s market is the Commercial You can also back flip. For those deals you can’t back flip, there are two ways to flip commercial real estate.

The 3 Ways to Turn Commercial Property:

1) Wholesale Flip- Purchase it under contract, and flip your contract

2) Value Add Flip- Get the contract under contract, find tenant(s), or make other major changes to NOI. After that close and resell your contract or flip it

3) Commercial Back Flips: Once you understand how to get the cash needed to close these deals the parties to a deal will be:
– Commercial Property owner in default
Attorney fighting for property owners
Lender who wants out by decreasing the debt or cashing in at a large discount
– You can be the facilitator who helps to find and put the deal together, it doesn’t even require any of your money.. Pretty cool.. huh..

4 Requirements Commercial Back Flip
1) Property must (almost always) be in default – (But it can’t be an REO)
2) The buyer (AKA the current owner) must wish to retain the property.
3) Must be creating NOI – we use this to calculate TODAY’S value
4) An exit lender must approve the refinance of the bridge loan within 6 to 8 months.

Here’s an example of a recent Commercial Back Flip

47 unit apartment – 95% occupied
Loan $1.4
Value $950,000
It was sold to us by a lender for $400,000
It was then returned to the owner at the closing tables, which was in foreclosure. We obtained lenders approval.

The next step is to carry the payments for six months in order to satisfy the requirements of the refi lender.

Then cash in on $112,000 profit…. very nice…

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