It’s usually much more difficult to secure a commercial real estate loan than a home loan. However, if you’re careful about how you proceed, you can generally expect to make a profitable investment and have a steady income from your commercial real estate investment. Here are some tips to keep in mind when you’re seeking a commercial real estate loan.
Apply Early for Your Loan
Keep in mind that commercial lenders sometimes exaggerate how quickly they can process your application. They might tell you everything will be handled in 45 days, but the truth is it’s more likely to take three months before your application has been fully processed.
Research Two or Three Lenders
It’s best not to put all your eggs in one basket, and hope that a single commercial lender will be able to satisfy your needs. You’ll be much safer if you apply with several commercial lenders, and then pick the one which offers the best deal.
Make Sure You Get a Term Sheet
You should not agree to pay for any kind of commercial appraisal unless your prospective lender has already issued a term sheet which lists all the terms individually. Term sheets are documents which indicate a lender’s interest in extending a specific commercial loan, and they will always include some kind of estimate of the terms which will eventually be used. This is not a binding document, but it’s generally considered a genuine expression of lender interest, so you should always try to obtain one of these.
Try to Choose a Nearby Lender
It is a well-established fact that most lenders have diminishing interest in commercial real estate transactions for properties which are far distant from them. The closer a lender is to the property you’re thinking of acquiring, the better your chances will be for approval.
Interested in a Commercial Real Estate Loan?
If so, we may be able to provide the financial assistance you’re seeking. Contact us at Magis Funding so we can discuss some possible options with you.