When you find a great commercial property that you want to buy time becomes a huge factor in everything that you do. Your first question to most lenders is about how quickly they can get your application processed and get you the money that you are requesting. Tip number one is that the standard answer in the commercial real estate loans industry is 30-45 days to complete the process. But the truth is that in most cases it takes more like 60-90 days to get through the process. Some of that could be due to ill prepared borrowers who are missing documents and information on the application but part of it is also going to fall back on the lender and their processes. So be prepared to spend several months ironing out the processed of completing commercial real estate loans.
Rule number two is to keep your options open. You never want to rely on just a single resource for anything in your business and commercial real estate loans are no different. You need to have a backup plan for several reasons. In some cases the lender might have very strict qualifications that you might not meet. Another issue could be the time that it takes for a lender to process your application. And even after you have applied and been approved, you might find that you are not in favor of some of the terms that the lender has in their contract. Having several options allows you to carefully evaluate your options and make a selection that is best for you and not just for the lender.
Tip three is one that can save you some money. Don’t get talked into requesting an appraisal on a property yourself. If you think that it is going to save you time and money, you are wrong. You can’t submit an appraisal to multiple lenders and save money. By law the bank must request their own appraisal and they must also have an environmental study completed on the property.
Starting with local banks and your local Small Business Administration office is smart. Local banks and smaller lenders are often willing to work very hard to beat out the competition for your business. But don’t forget to check out your options with some of the big lenders. Different lenders have different criteria for loan qualification as do lenders of different sizes.
If your first application or two gets turned down, don’t give up. There are many different types of lenders out there. You might need to look into alternative lending options to start with and move to a more conventional lender in a few years. But take the knowledge and experience you have gained on the first few applications and keep looking for your perfect lender.
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.