What Is A Commercial Note
Commercial notes include notes on properties such as for:
- Office buildings
- 5+ unit apartment buildings
- Auto repair
- Gas stations
- Mixed-use (e.g. commercial downstairs and apartments upstairs)
Commercial note buyers evaluate commercial notes differently than with other types of notes in several ways. We want to understand the business that is there and how the property is used, we use a different approach in appraising the property, and we understand that the payer is frequently an LLC or corporation. Commercial notes where the collateral is only the business and where little or no real estate is involved are called “business notes” in the industry. We are able to also buy many business notes.
The steps involved in selling a commercial note are quite similar with those used for selling other note types. If a commercial appraisal is required, that will take longer than a residential or land appraisal. Fortunately, we rarely require a full commercial appraisal to be completed.