When you are serious about your commercial real estate, pun intended, you mean business. Nevertheless, you may be asking yourself, what is the best way to ensure that you actually get a commercial loan or non-residential mortgage? Well, the answer to that question is, there are a couple of ways to ensure your receive your commercial loan, regardless of your situation.
The first way to always secure the commercial financing you need is to use what is referred to as private money. Private money, not to be confused with hard money, is essentially when you have the money yourself or you reach out to a private source i.e. a non-bank, an investor—you get the picture. The reason that private loans or private money is a sound way to obtain a non-residential mortgage is because a. you may have a lot in savings already or b. you might have just met your match with a particular real estate investor. The point is if you are creative enough you can obtain your commercial funding yourself or work with someone who is in the business of seeing a nice return on their investment, either way there’s less red tape which means there’s more of a guarantee, sort to speak.
Another ways to obtain the funding of your dreams is to use seller financing. If you have no idea what seller financing is that’s okay. Lets’ go over it. Seller financing is just that i.e. it is when the seller essentially lenders you the money to make the purchase. Thus, you are still obtaining a commercial loan with interest and a repayment schedule, the source is just the seller.
Clearly, commercial seller financing is not always a win-win situation. In other words, there are some pitfalls you need to avoid such as super high interest and the seller may be wary due to their own set of possible pitfalls such foreclosures, paying off the existing mortgage or issues of abandonment (buyer abandonment). Thus, it is everyone’s interest to take the necessary precautions (references, full financial picture of buyer and seller, etc.) to ensure that it can be a win-win solution that ends in you securing your non-residential mortgage (and only one at that). Similarly, when it comes to private money, it always pays to take the necessary precautions. Remember, you want your non-residential mortgage like yesterday, but that doesn’t mean skipping your due diligence.
Lastly, if you aren’t too crazy about private money or seller financing, you still have one surefire way left—leverage. Leveraging a business line of credit is the most user-friendly way to secure a non-residential mortgage. This means you can establish creditability and get your funding. Thus, with that being said, you now know what to do as well as what not to do when you want your commercial funding and you want it now!
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.