Are you considering a commercial real estate loan to fund your next investment property? Commercial loans are very popular today because of the high return on your investment. Investment properties are appreciating at around 10% per year. In rare cases, you can even find properties that double their value ever 5 to 6 years. Commercial loan interest rates run anywhere from about 11% to 17%, so you can clearly see that the appreciation of the property offsets the high interest rates that you encounter with a commercial loan.
If you are new to the real estate investing venture, I am sure that you have a few questions. I will address some of the most common questions with their answers to try and help you understand if a commercial real estate loan is for you.
First, you might ask, what are the advantages of these types of loans? They offer fixed interest rates that are locked in for the life of the loan. You can obtain one of these loans to create an organization, or build your current organization bigger and better. You can also use these loans as a way to refinance an existing property.
When it comes to options, you have a few. You can either obtain a hard money loan, a conventional loan, or a government regulated guaranteed accommodation. Just like personal real estate loans, you can borrow up to 80% of the loan to value of the property. You should expect that you will earn back your investment in about 10-40 months.
Second, you might ask, what types of loans are there for commercial purposes? There are privately funded loans, also known as hard money loans. These types of loans are usually easier to get but have a much higher interest rate. There are also conventional loans and government backed loans. Each of these offer much lower rates, but are more difficult to obtain.
Last, you might ask, what are the tax benefits of owning a commercial investment property? When real estate appreciates, or increases in its value, you can refinance and take the cash out to roll into other properties or assets. If you do this, you will not be taxed on the amount your property appreciates. Any of the money you use for personal expenses, must be taxed by law.
Obtaining a commercial loan is like fitting the pieces of a puzzle together. If you have the right loan officer and sellers, your experience can be pleasant and very rewarding.
Whether you have been turned down or away before because of your credit, situation or risk factor, there are thousands of commercial loan programs in the U.S. and abroad that most commercial loan brokers aren't aware of due to access restrictions.
Regardless of your desired loan size is, whether it be just a few thousand dollars or a few million, there is a solution. There are thousands of International investors & commercial financial institutions worldwide that provide funding to low, medium & high risk businesses with competitive interest rates.
The problem with most commercial loan brokers is that they are only experienced in tapping into a select few, although well-known commercial lending institutions in the U.S. and nearly all offer the same rate, whereas other brokers who have industry connections can tap into not only a few, but several thousand lenders where interest rates & conditions can be negotiated in favor of the individual or business seeking a commercial loan.
In the commercial lending business there are "wholesale" and "retail commercial interest rates" offered by the banks & institutions. Having a backdoor connection to access wholesale interest rates is key.
Commercial loan broker's that can access databases of investors and lending institutions that offer base wholesale rates with minimal "life of the loan" profit are able to pass the savings to the client.
Additionally, with thousands of international investors & funding institutions available, they are all hungry to make money just to earn cash from the Interest rate. As such, obtaining loans through a backdoor pool of U.S. based & international commercial lenders is incredibly easy, regardless of your credit or current situation. Whether you have documents or not.
With a broker experienced in guerilla commercial loan financing and negotiation, not only will you have powerful leverage in the real estate industry, but you will have a wide array of financing options for your specific situation.
The commercial lending industry is very unique, yet difficult navigate for those that are not in the ideal position to be seeking a loan. But, there are solutions whether it be domestically or Internationally.
Finding a commercial broker who has experience in seeking loans for those in a not-so-good situation is vital if your real estate goals are to be achieved.
Both Bart Icles & Allan Znoj are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Bart Icles has sinced written about articles on various topics from Body Building, Health and Disease & illness. Bart Icles is an expert when it comes to ,. Bart Icles's top article generates over 60500 views. to your Favourites.
Allan Znoj has sinced written about articles on various topics from Investments. Allan Znoj is a professional hard money commercial loan insider with many years experience in the commercial lending industry assisting clients secure hard money loans. He takes an unorthodox and resourceful approach when searching for lenders. Visit his. Allan Znoj's top article generates over 720 views. to your Favourites.