If you are ready to invest in Commercial Real Estate, you need to look into the best way to finance your investment. On the debt side, there are typically only two options available, a Conventional Mortgage or a Hard Money Loan. Below you will find information on the process of these options.
Applying for a conventional mortgage can be a slow and arduous process requiring much documentation. At the other extreme, you might be able to secure a hard-money loan in days without producing copious financial information, especially with a strong asset because they are lending on the property equity and not the borrower’s credentials.
In general, banks and lenders will require you to meet these commercial real estate loan qualifications:
- Up to five years of tax returns.
- Your books, records and financial reports for up to the last five years or since inception, whichever is shorter. Will include off-balance-sheet financing, such as leases.
- Projected cash flows for the life of the loan.
- The credit reports of the business and all owners/partners.
- Your state certification as a corporation or limited liability entity.
- A third-party appraisal of the property.
- A business plan that explains how the property will be