If you want to invest in commercial real estate you will, at some point, have to look into finding commercial property investing finance options. When it comes to finding financing for such a large amount of money, it can be a challenge.
A commercial property can be anything from a storage unit to a shopping center to a twenty-story office building. These types of real estate investments can be extremely lucrative but they aren’t for the real estate investor novice.
Commercial Property Investing Finance loans can be a challenge to obtain due in large part to the sheer size of the loan. If you want to invest in commercial real estate, though, you might as well start learning the ins and outs of getting approved for these types of real estate loans.
One of the best things you can do for yourself is to find a knowledgeable loan broker to work with. A broker who specializes in these types of loans is best. Their knowledge and expertise can help you avoid time-consuming and potentially costly mistakes.
Since most lenders will not look at multiple versions of the same loan package, have your broker deal with submitting all the information. Don’t ask them to submit it and then submit it yourself. That is just a waste of time and effort.
First of all, you will need to compile a complete listing of all the existing tenants of the buildings. This is called the rent roll and it must be filled out accurately and completely. It is also necessary to include the exact terms of each lease with each tenant. The bank wants to know that you will be making enough on rents to make your mortgage payments.
Most lenders will request a minimum of three years of financial information on the property. Also, make sure you include multiple, clear, photographs of the property so the bank can get an accurate feel for the building.
You will also want a minimum of three years of your income tax returns as well as those from all other potential owners or corporate entities that will be owners of the property.
All of these things are very important but one of the most important is this: a well-written loan request letter. Remember, you only get one chance to make a good first impression. Make sure that you sound professional and knowledgeable and that you include all the information the loan officer will need to make a decision.
They will quickly lose patience with you if you don’t provide them with what they need when they need it. In many cases, these loan officers will get bonus pay whenever they get a loan approval. For that reason, they don’t want to dilly dally with any one loan application.
Be as positive as you can be about the potential of the property, but don’t lie. Most loan officers have been doing this a long time and if you make this seem too good to be true they will likely get suspicious and think you are hiding something.
When investing in commercial property you have to be patient. The process of buying this type of property does not happen quickly. Being prepared and patient is the best thing you can do to ensure your Commercial Property Investing Finance loan gets approved.