Investing in commercial property may have been a big endeavor that is intended to provide for your future and make a mark on your portfolio. While you knew investing in real estate was a long shot, you took the plunge. You, however, came under bad luck and now face commercial real estate foreclosure.
You may be wondering what your next steps should be. Should you foreclose on your investment? Is foreclosure your only option? If you run a business or invest in property, then here’s what you may need to know:
1. Loan modification
You may be struggling to pay off mortgage payments. While it’s still early, before you face foreclosure, you may try modifying your loans. Restructuring your loans may make mortgage payments more accommodating.
When you work with the lender on a modification, you may be able to:
- Increase the years to pay off your mortgage
- Decrease interest rates
- Eliminate late fees
- Reduce the monthly mortgage payment
You may have to present documentation to your lender that would approve the loan modification. These documents will support your plea for a loan modification.
2. Bankruptcy
One of the many options that anyone has is bankruptcy, specifically for your business, Chapter 11 bankruptcy may be your best option. While your credit score will take a hit from bankruptcy, you may be able to make strategic moves that can restructure your debt and assets and resolve the need for foreclosure.
3. Commercial short sale
You may have the option to sell your commercial property or move your business under a short sale. Short sales may spare you the ramification of foreclosure. You may be able to resolve your debt to your lender by short-selling your property.
You may need to provide evidence of your struggles that will help settle your contract. Before committing to your options, you may need to seek legal assistance.