How to Purchase Commercial Real Estate in Texas as Owner Occupied
December 2, 2024
Buying owner-occupied commercial real estate in Texas is a significant step for any business owner. Taking this step could create benefits such as building equity, tax advantages*, and greater control over operating costs.
The process of buying commercial property involves several key steps, and partnering with Texas Gulf Bank can simplify your efforts through the effective guidance and strategic financing options we offer.
Learn how to purchase commercial real estate in Texas for owner-occupied properties, the different loan options available, and how Texas Gulf Bank can help support you through each step of the loan application process for a typically seamless experience.
What is Owner-Occupied Commercial Real Estate?
Owner-occupied commercial real estate refers to property where the owner’s business occupies at least 51% of the building. These properties can be used for a wide range of industries, including professional services, healthcare, industrial, retail, and countless others. The concept is to offer business owners a stable environment for growth while simultaneously building equity.
By purchasing commercial property for your business, you effectively become both the owner and tenant, which means you can control your monthly costs, avoid unpredictable rent hikes, and tailor the space to your company’s needs.
In addition, owning your property may allow you to benefit from long-term appreciation, additional revenue streams by renting unused space, and improved cash flow.
Evaluate Your Needs Before Purchasing Commercial Real Estate
There are many different types of commercial real estate properties, so it can be difficult to know which one is the ideal choice for your business:
- Office building
- Retail location
- Manufacturing facility
- Hotel / Hospital / Hospitality space
- Mixed-use space
Before starting your search for a property, it’s essential to define the specific needs of your business. Whether you need new office space, retail space, medical offices, industrial property, or even raw land to build a custom facility, ensure your real estate purchase will align with the long-term goals of your business. Here are some specific factors to consider.
Location
Location is critical in real estate. You will want to confirm the property is easily accessible to your clients and employees, and that it meets local zoning laws for your intended business activities. By researching these issues ahead of time, you may be able to avoid costly issues with zoning restrictions or stringent property regulations.
Budget
Your company’s budget, financial standing, and cash flow are vital factors when purchasing commercial real estate. An owner-occupied commercial property may allow you to stabilize cash flow instead of paying monthly rent to landlords, while also building equity.
However, you need to ensure that you are in a healthy financial position to make a significant investment in owning and operating your own commercial property.
Condition of the Property
Before you buy commercial real estate, you should take the time to conduct thorough due diligence to ensure the property you’re purchasing has no legal, financial, or environmental issues that could cause problems later.
For example, you will want to schedule an Environmental Site Assessment (ESA) inspection to ensure the property does not pose environmental hazards. Also, you will need to perform building and land inspections to confirm the facility and land are safe.
Space Requirements
Consider your current space requirements and factor in any expected growth. Whether you need space for employees, equipment, or inventory, it’s important to confirm the property can accommodate both current and future needs.
Work With a Local Team of Lenders
As a local bank, Texas Gulf Bank offers regional insight and lending expertise to help you identify the ideal property for your commercial needs. Our local lenders can help you review key factors in your situation to determine the right course of action – and evaluate financing options to support your needs.
Select the Right Financing Option with Texas Gulf Bank
Most businesses need access to financing to purchase commercial real estate. Fortunately, there are various financing options available through our bank to help businesses acquire commercial real estate while aligning with your financial strategy and business goals.
Texas Gulf Bank offers a variety of commercial real estate loans tailored to owner-occupied properties, including the following options.
SBA 504 Loans
One of the most popular financing options for owner-occupied properties is the SBA 504 loan. SBA (Small Business Administration) loans are partially guaranteed by the federal government and are specifically designed for businesses looking to buy or improve commercial real estate.
The SBA encourages small business growth by making financing options more accessible, especially for growing companies and established businesses. Their primary way of supporting businesses is by partnering with banks, such as Texas Gulf Bank, to provide an SBA loan guarantee on a portion of the loan amount to eligible small business owners.
The SBA 504 loan program is designed to allow you to preserve working capital while still investing in commercial real estate properties. Interested applicants must meet specific business qualifications to be eligible for SBA loans, and the business must occupy at least 51% of the building to qualify as owner-occupied.
Our dedicated team of SBA lenders can help you determine whether this lending option is the right fit for your business.
Commercial Real Estate Loans
If you prefer a more conventional financing option, Texas Gulf Bank offers traditional commercial real estate loans. Traditional commercial real estate loans can be excellent for businesses looking for fewer restrictions on how they use their property, such as leasing a portion of it for extra income.
These loans are ideal for businesses that want to pursue commercial property ownership while also creating viable revenue streams by leasing out unused areas of the property.
Land Loans
For businesses that want to purchase raw land now for future development or business facilities, a land loan through Texas Gulf Bank could be a good option. You can acquire land now, and then wait to secure financing for future construction or land development.
For example, land loans are ideal for industrial or manufacturing businesses that need more time to develop land and make property improvements for utilities, roadways, and drainage before constructing facilities.
Why Choose Texas Gulf Bank for Your Commercial Real Estate Purchase?
Texas Gulf Bank brings extensive experience and local expertise to help Texas business owners purchase commercial property. We have an in-depth understanding of the Southeast Texas Gulf Coast region, including zoning laws, property types, and market trends, making us a valuable partner for your real estate investment.
With an array of strategic loan options to choose from, you may be able to access the financing you need to secure owner-occupied commercial property in Texas.
When you choose Texas Gulf Bank, you gain three distinct advantages:
Customized Solutions
Whether you need a traditional loan, an SBA-backed loan, or a land loan, Texas Gulf Bank offers a variety of loan programs tailored to your needs. Instead of taking a one-size-fits-all approach, we take the time to understand your unique business needs and work with you to create a custom lending solution that provides reliable financing while fueling growth.
Expert Guidance
Our team of experienced loan officers and SBA specialists will guide you through the entire loan process. We’ll be with you through each step – from property search to closing –helping to ensure a smooth and informed transaction.
Long-Term Partnership
Texas Gulf Bank is committed to supporting your business’s growth, offering ongoing financial solutions to meet future needs. We value building strong relationships with each of our clients and strive to help them reach new heights of success.
With a wide range of strategic loan options, reliable banking solutions, and exceptional customer support, Texas Gulf Bank is the commercial real estate loan partner you need to pursue growth opportunities.
Enjoy A Better Loan Experience
With over 110 years of banking experience, Texas Gulf Bank offers an efficient and streamlined loan application to save you time and resources so you can focus more on business needs.
Our loan application process begins with an initial meeting to discuss future plans and goals for your commercial property investment so that we can help identify the best possible loan solutions. From there, we can make loan recommendations that fit your timing, budgetary needs, and long-term financial goals.
Part of the loan process includes thoroughly evaluating the land being considered for purchase, including the property location, area demographics, environmental assessments, and nearby competition.
To determine loan viability, all loan applicants will need to provide the following financial documentation, including but not limited to:
- Budget for land and/or construction needs.
- Three most current filed years of tax returns and financial statements for the company.
- Most recent year-to-date balance sheet and income statement.
- Personal tax returns from individual guarantors from the past three years.
- A current personal financial statement.
- Land plat/survey.
- Construction plans, including building elevations.
Once all documentation is received, our loan review team will assess your loan application. As a local bank that makes in-house lending decisions, we aim to provide an expedited loan review to our customers. If your application is approved, we will process loan closing and funding as soon as possible to support your commercial property investments.
How to Purchase Commercial Real Estate: Contact Our Bank
Purchasing owner-occupied commercial real estate in Texas is a significant investment in your business’s future. With the help of Texas Gulf Bank and our range of financing options, the process can be smooth and stress-free.
Texas Gulf Bank is the lending partner you need to begin your journey toward commercial real estate ownership. Ready to take the next step? Contact Texas Gulf Bank today to discuss how to purchase commercial real estate in Texas with our financing solutions.
Let our experienced team support your company through the process, helping to ensure that your investment leads to long-term success!
– To learn more about commercial financing options through Texas Gulf Bank, subscribe to our email newsletter. You’ll receive regular updates about our different loan programs, business banking services, and the latest banking news directly in your inbox.
*Consult your tax advisor for IRS rules related to potential tax advantages based on your particular circumstances.
All loans subject to credit approval