Finding the right commercial lender can be an arduous process, but it is critical for the success of your real estate ventures. Each investment is different, so it is not always about who you might have worked with in the past, sometimes it is about what lender is going to best serve your needs for a specific project.
Commercial lenders often specialize in various areas of real estate development and investing. Just because you have worked with one on a multi-family housing unit does not mean that they are going to be the best fit if you are interested in purchasing a commercial space that you plan to develop into an office complex.
Naturally, then, the first thing that you are going to want to do is find lenders that are experts in the area in which you are trying to invest. You do not want to work with someone who is only going to be one step ahead of you in knowledge. In fact, some of the best commercial lenders, who are experts in their field will often be able to provide you with customized recommendations and reports so that you are able to make much better decisions than if you had simple, generic information.
Another factor that you will want to take into consideration is the size of the loan that you are seeking and the size that the lender is used to dealing with. This goes both directions. Not only do you not want a lender who is used to dealing with a small loan if you are looking for a large one, but you also don’t want the reverse. It comes down to a matter of expertise, service for you and ability to answer your specific questions.
Once you have established that your potential lender is an expert and is used to dealing with loans in the amount that you are going to need, you should also ask what loan options are available. Often times, commercial lenders have a variety of strategies for funding projects. The more options that you have to pursue, the better the chances are that you will find a loan that can be modified to fit your custom needs. For a skilled lender, it should be no problem to provide you with a few different approaches, depending on your personal preferences and the unique factors of the market.
With all of these questions, don’t I run the risk of ostracizing potential commercial lenders?
Absolutely not. At the end of the day, you need to remember that you are their customer. They do not make any money unless they are able to give you the loan that you are seeking. Let them know that you are vetting other lenders so that they know that they need to be on the top of their game. There is absolutely nothing wrong with asking lots of questions so that you have all of the answers you need to select the best possible lender for you. In a competitive market, commercial lenders should understand this and do their best to court your business. If they do not, there are plenty of options that will be available to you.
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.
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