What Are The Differences Between A Commercial Real Estate Loan and Residential Real Estate Loan?

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What Are The Differences Between A Commercial Real Estate Loan and Residential Real Estate Loan?


p1_img2Do you have the home of your dreams and are now ready to have the business of your dreams? Chances are good that you will need a loan. If you think that there are no differences between a Commercial Real Estate Loan and a Residential Real Estate Loan–think again. Here is a helping hand on generally what to expect.

Here is some good news! If you have a home, chances are that you’ve had, or do have, a Residential Real Estate Mortgage for your home–and you’ve had the chance to apply for and acquire a Residential Real Estate Loan. So, you’re not completely unaware of some of the process it takes to get a loan, in general. However, there are indeed key differences when it comes to applying for a Commercial Real Estate Loan for your potential business venture. More good news! Level 4 Funding can assist you with both types of loans with speed and flexibility. Let’s focus on Commercial Real Estate Loans here.

Ultimately, a lender will need key documentation and paperwork for thorough review in application of a Commercial Real Estate Loan and in order to consider approval for a potential loan quote. In some cases, the lender is a financial institution–a bank–and in cases where applicants need faster approval, are competing with others for a bid, or have not been approved by a bank, a Commercial Hard Money Lender like Level 4 Funding is the way to go!

With Commercial Real Estate Loans, the biggest difference is that your personal income is not considered in any way with respect to the application process. So, your personal finances are neither “here nor there,” and a moot point when it comes to business. With your Residential Real Estate Loan application, the information was essential. With your Commercial Real Estate Loan–not at all. The profitability of the commercial property is the focus–not your personal affairs.


What Other Expectations Should You Have About

The Differences With A Commercial Real Estate Loan?

As mentioned, with the application process for a Commercial Real Estate Loan, the consideration of profit on the property is most key. So, when preparing and submitting proper documentation and all back-up paperwork to a broker, etc., be ready to provide financial information on the commercial property itself, that is–income, expenses, rent, etc. These financial disclosures (statements) are essential, in addition to your business plan and more. Ultimately, the lender, even a Commercial Hard Money Lender, is surmising what income will be like for the property at soon as your doors open for business.

The good news is that A Commercial Hard Money Lender Wants A Win-Win Solution.

Collect Your Data, Research A Lender, And Get A Date For A Meeting

In Order To Be Successful With Your Commercial Real Estate Loan.

Commercial Hard Money Lenders are wonderful options when and if you may be turned down for a loan from a bank, and/or if you are in a rush in order to compete with other bidders. Once a lender receives all the proper documentation and paperwork, the assessment will begin and a quote will be made if you’ve been approved. The offer amount–rates, criteria, etc.–for your Commercial Real Estate Loan will depend on all of this information, plus various property evaluations. The focus is on profit,


Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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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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