Setabay Private Hard Money Lender: commercial real estate loan

Showing posts with label commercial real estate loan. Show all posts

Tuesday, October 10, 2017

Commercial Real Estate Loans: Chinas regulations to curb new home purchases are fueling speculative demand

Efforts by the Chinese government to slow down commercial real-estate loans on multifamily properties are doing little to curb demand.

This year regulatory authorities in China issued a spate of new rules to slow down speculative home purchases. The new rules raise the minimum down payment required for mortgages and limit the number of apartments that each citizen or family can own.

However these new regulations are simply raising prices on multi-family apartments in many regions. Price increases that fuel speculation that home values will only continue to climb. This speculation has led to a wave of investment property purchases throughout China. Many speculate that the new restrictions will be lifted in the near future as the government attempts to spur economic growth. Should the multi-family market encounter any trouble there is a general consensus that the government will take drastic steps.“The government will spare no effort to make sure there are no big swings in the property market,” said Ni Pengfei of the Chinese Academy of Social Sciences.

The explosion in the multi family market stems from the Chinese governments increased reliance on household borrowing in order to fuel growth. As a percentage of GDP Corporate debt has reached an unsustainable 164 percent. Recently the government turned to household borrowing as a way to prop up growth. Early in 2016 the government relaxed its housing policies due to the economic slow down in China. President of the Peoples Bank of China Zhou Xiaochuan declared that residential mortgages were “relatively safe.” Mortgages for new apartments grew by 10 percent year over year immediately following his comments. Chinese households once carried relatively little debt, which once gave some assurance that the housing boom would not result in a wave of catastrophic defaults. But household debt has now peaked at 42 percent of GDP. Notably household debt in the US stood at 85 percent prior to the housing crisis and Chinas household debt may be rapidly approaching a similar number.

Commercial real estate loans and lending practices are fundamentally different in China easing some fears about an impending crisis.

Chinese Home buyers must still make a substantial 30 percent down payment on any mortgage they take out. In contrast the lending environment prior to the Great Recession was characterized by the issuance of mortgages with little to no money down. The incentive to expand lending to unqualified borrowers is lower too, as Chinese lenders have few ways to securitize and sell off large pools of loans. Many US households were over burdened by home equity loans prior to the recession. This type lending has not caught on in China.

Commercial real estate loans used to finance the construction new apartments are have become essential to fueling Chinas growth.

Activity related to the construction of new apartments now accounts for a third of Chinas economic activity. Any slow down in this sector could cause regulators to lift safeguards in order to boost the economy. Moodys states that 68.8 percent of Chinese household assets consist of real estate. A decline in home values would eat away at the assets of many Chinese citizens. There is the further danger that half of recent sales were for the purpose of investment, according to Ni Pengfei. Should these investments falter any related mortgages will likely default. If that happens the US will no doubt feel the effect as the economies of both nations depend so closely on one another.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, September 20, 2017

Interest and Fees You Will Pay for Commercial Real Estate Loans Texas

Considering the long and arduous application process, you might be happy to simply get approved for any commercial real estate loans Texas, but you need to evaluate the cost of each loan. Selecting the loan with the lowest interest and fees will save you a great deal of money.

Whenever you are shopping for a loan, the first item that you look at is the interest rate and that is also important on commercial real estate loans Texas. The rate that you will be offered is going to depend on the type of business that you are in, the financial condition of your business and also you creditworthiness. In some cases your business will not have enough credit history to secure the loan and you will need to provide your personal credit and financial information to secure a loan as a guarantor on the loan.

The interest rate on commercial real estate loans Texas tend to be a bit higher than on a residential mortgage because of the increased risk that it represents to the lender. Because the value of commercial property is more volatile, lenders want to get a little bit better return on their investment. It is not uncommon to find rates ranging from 3.5% to around 6% depending on the type of lender that you are working with. The loan to value rate of the property can also influence the interest rate. The more money that you put down the lower the percentage of the price of the property you are financing. This means that the lender is willing to give you a slightly better rate. The primary reason is that they are concerned with the property holding enough value to cover the outstanding balance on your loan should you default. So the larger down payment means that you have instant equality and the lender is more confident that they will always be able to recover their investment in you.

Understand the Fee Structure and Payment Timeframe

In addition to paying interest you will pay fees to get commercial real estate loans Texas. You will be required to pay for the property appraisal, legal costs, the loan application fee, the loan origination fee and also the survey fee. Some lenders want these fees to be paid prior to the loan approval and others will simply apply the fees annually. If you are not sure that you will qualify for a loan then you will want to be careful to select lenders who will waive the payment of fees until after the loan is approved. Also, you will need to pay the appraisal and survey fees to all lenders as they are legally bound to complete those tasks themselves and cannot “share” the appraisal or survey documents.

Know the Total Cost of Borrowing Money

There are many terms and costs that are unique to commercial real estate loans. Knowing what all of these terms mean and how they will impact your ability to make payments is important. But the most important factor is knowing the total cost of the loan that you are requesting. Adding all of the fees to the interest will allow you to better compare your options and select the loan that is truly the best deal to meet your needs.

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Mistakes to Avoid When Applying for Commercial Real Estate Loans Texas

Understanding the process for securing a commercial real estate loan Texas will help you to avoid wasting time and being declined. The process requires more than most business owners grasp or are prepared for.

Businesses can seek a loan for many uses but one of the largest loans that you might be seeking is also the most complex. Seeking a commercial real estate loan Texas is a process that needs to fully research and understood to ensure that you are successful in getting your loan and also that you get the best loan to suit your needs. Avoiding a few of the most common pitfalls along this journey can insure that you enjoy a successful application process and can purchase the property that your business needs. The first step in the process can be one of the most critical. You need to shop for the right lender who is offering terms that fit into your budget. This also means that you will need to be familiar with the terminology of commercial real estate loans to be able to accurately compare the terms being offered. It is also important to remember that even though you have an existing relationship with a bank, you will want to explore other options to seek what is currently available.

Your next selection can be equally as important as the lender that you select. As with any legal document, you will want to be certain to have a lawyer review the agreement prior to signing it. Selecting a lawyer with experience working in commercial real estate loans Texas is critical. This will insure that the loan paperwork is in order, that you are getting the deal that you asked for and that the terms are fair and legal.

Know What You Can Afford

You have obviously reviewed your business finances to be certain that you are ready to take on a commercial real estate loans Texas, but you need to have a strong plan in place. Your business plan is a good starting point as that was drafted as a guideline for the growth and progress of the business. But now you need to include how you are planning to pay off the debt of your new building. This might include reducing other costs and expenses, increasing your product line or offering products to a larger market. Not only will this help you to be certain that you can repay the loan but it will also help to give your lender confidence in your ability to make the payments.

Be Prepared On All Fronts

As a business owner, you are familiar with the stresses brought on by the ever changing business landscape. For this reason, you need to be very well prepared both financially and professionally. Having cash on hand for unexpected expenses or to cover the cost of the fees of your loan is important. This planning also demonstrates your financial responsibility to your lender. In addition, you need to have all of your financial documentation in order. This includes all of the profit and loss statements, bank statements and balance sheets current and available for the lender to review. It is also important that you have your personal finances in equally good order. These could be important if your business has little credit history or is only a few years old. Avoiding these common issues will make your application process much less stressful and will increase your chances for a loan with great terms.

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The Process for Commercial Real Estate Loans Texas

As the name implies commercial real estate loans Texas is the means that you will use to borrow money to purchase a business property. But what you might not know is how the process works and how you need to prepare.

When you begin to look at commercial real estate to purchase for your business, you will find that the prices are quite high. The only reasonable approach to purchasing a property is to get commercial real estate loans Texas. But don’t fool yourself into believing that this is just like getting your home mortgage loan only a little bit larger. The process is much more complex and will require careful and detailed planning on your part to be successful.

The first important fact to know is that commercial real estate loans Texas are secured by a lien on the property that you are buying. This is a document that gives the lender the legal right to seize the property if the borrower does not make the payments or fulfill any of the other terms of the loan agreement. In some cases there are very detailed clauses in the lenders agreement about the types of other loans that the borrower can enter into or the types of business partnerships or agreements that they can enter into during the time frame of the loan. This is just one reason that you would want to have any loan document reviewed by your legal professional prior to signing it. If you fail to meet any of the terms, even those that are not associated with making the payments, you could be in violation of the agreement and face a foreclosure.

In addition to the security of holding a lien on the property, the lender is going to require that you build instant equity in the property by making a down payment of 20% to 30% of the cost of the property. This is because the value of commercial real estate is more volatile than residential property. The economy can cause the price to fluctuate more quickly and drastically and the lender wants to be certain that the value of the property is always in excess of the loan amount. This insures that if the lender is forced to seize the property, then they can sell it to recover their full investment.

Learn the Terminology

In order to fully understand your commitment to the lender, you will want to take some time to learn the terminology that is common in commercial real estate loans Texas documents. This is how you will learn about the time period that you have to repay the loan and also how you will determine the total cost of the loan, the interest and the fees.

Have Your Documents in Order

It is also important that you have all of your businesses financial documents in order prior to applying for a commercial loan. You will need current and historical bank statements, rental agreements, balance sheets and tax records. If the business has no credit history, is only a few years old or has no previous loans then you will also need to be prepared to submit your personal financial information to the lender. This could be used to determine your creditworthiness to personally guarantee the loan for the lender. Knowing this information can help to make the process less stressful and more successful for your business.

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Understanding the Repayment Terms of Commercial Real Estate Loans Texas

It is important to understand that the repayment terms of commercial real estate loans Texas are not like a personal mortgage for your home. Not only is the dollar amount larger but the terms are often much shorter.

Many business owners have some very unrealistic expectations when they start to look at commercial real estate loans Texas. They are expecting the same type of terms that they would get on a residential mortgage and are alarmed when they learn that is not the case. Where a residential real estate loan is typically 30 years, commercial real estate loans are broken into two main categories regarding their length of repayment term. The shorter of the two types is an intermediate term loan and it is three years or less and the longer term loans range from five years to twenty years. So the shorter term can make it much more difficult to repay the large loan amount needed for a commercial property purchase.

Another difference is that only some commercial real estate loans Texas are amortized. An amortized loan is one in which the loan gets repaid in fixed installments until you have paid back the entire amount. It is the same type of payment that most consumers have on their home mortgage. You make payments each month, at a fixed amount, which covers both principle and interest. But many commercial real estate loans Texas are not amortized so at the end of the term you are facing a balloon payment. The balloon payment is usually quite large but the reason many business owners elect to use this type of loan is that the monthly payments are lower. During the course of the loan, the borrower is paying only the interest on the loan amount so the balloon payment ends up being almost the entire amount of the principle. When this occurs, most businesses are forced to refinance the balloon amount to a new loan.

Beware of Prepayment Terms

As a homeowner, you are looking forward to any opportunity to pay a little extra on your mortgage to save some money on interest. But that is not normally the case when you are talking about a commercial real estate loan. There are several clauses that are added to the contract to protect the lender from the loss associated with an early payoff. A prepayment penalty is a fee or penalty that is calculated by multiplying the current outstanding balance by a specified prepayment penalty. An interest guarantee is a specific amount of interest that the lender is entitled to even if the loan is paid off early. And a lockout states a specific time period in which the borrower cannot pay off the loan. It could be a stated as a 5 year lock out and the borrower would need to wait longer than 5 years to pay off the loan.

Understand What You are Agreeing to Prior to Signing on the Dotted Line

There are many differences between a commercial real estate loan and a residential real estate loan. The biggest difference is the dollar amount but the differences in the terms are what you need to be aware of. Knowing the different repayment terms and clauses will help you plan how and when you will repay your loan.

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Tips to Help Manage Your Expectations When Seeking Commercial Real Estate Loans Texas

Getting commercial real estate loans Texas is more complex than you might expect. Knowing these few tips will help you to understand what to expect and how to succeed when submitting your application.

The greatest frustration for most borrowers who are new to commercial real estate loans Texas is the time frame that it takes to complete the application process. Most lenders will paint a rosy picture about getting you a response in just a few days and that the money could be in your hands in just about a month. That is pretty much just salesmanship to get you to complete the application with them. In most cases the lead time to get funding is around three months. Some lenders will say that is only if the borrower does not follow the application process to the letter, but there are many forms and documents required.

You also need to expect the fees that you will be charged for the loan application, the loan origination and also survey and appraisal fees. All of these are part of the cost of getting commercial real estate loans Texas. But what you also need to know is that you don’t need to pay all of the fees before you are approved for the loan or at least have a good chance of getting the loan. A lender will issue a term sheet which is a good faith estimate of the fees and terms that would be included in your loan documentation. This is a good sign that you are on your way to getting the loan you requested. Once you see that document, then you can feel a little more secure in paying for the appraisal fee and the loan doc fees.

When it comes to the appraisal fee, you might be tempted to have the appraisal done yourself to try to save a few bucks. This could make a lot of sense if you are applying to a few banks and want to pay for only a single service. But commercial lenders are required by law to request their own appraisal. So don’t get talked into paying an extra appraisal fee thinking it could save you time or money.

Beware of Individual Lenders

When you are reviewing your options for commercial real estate loans Texas, be sure that you know who you are doing business with. There are many dishonest people who will claim to be an investor only to get you to pay high fees to apply for a loan. They might promise that the fees are all rolled back into the loan or that they offer a much lower interest rate than a bank but it is all a scam.

Pick the Right Size Lender

Matching the size of your loan request to the size of the lender will make the process go much more smoothly for you. Taking a small request to a national bank who lends billions each year is only going to frustrate you. You will be thrown into a process that is very detail oriented and you might not even speak to the person who is you loan officer. Likewise, taking a huge request to a small local bank is likely to get you very little help or a loan. They will be overwhelmed with the large request and not have the processes in place to work at the scale that you need. Making a good decision about a lender is the first step in a successful loan request.

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Key Terms to Understand When Considering Commercial Real Estate Loans Texas

Commercial real estate is valued differently than residential real estate. Knowing some key terms will improve your understanding of commercial real estate loans Texas.

Residential property value is determined greatly by the location and the size of the property as well as the amenities and finishes. But commercial real estate is a very different entity. The greatest value in a commercial property is the usable square footage. The ability to make money through the use of the property is all that really hold value so the current condition and features are not really as important as they would be in a residential property. Knowing and understanding the key terms used when evaluating commercial real estate will help you to better understand commercial real estate loans Texas and why certain properties hold more value than others.

Net operating income is a critical factor in determining the potential value of a commercial property. NOI is determined by evaluating the property’s first year gross operating income and then subtracting the first year operating expenses. As you would expect, you want to have a positive NOI. When a property makes money in its first year it is a strong indicator that it will continue to turn a profit and that is what increases the value of a commercial property. When a property has a positive new operating income then that property is going to be great collateral for commercial real estate loans Texas.

Cap rate is a term that is also used to evaluate an income producing property. This is an important term if you are purchasing a property and will be using part of it for your business and renting out the remaining portion of the property. The cap rate is used to project the net present value of the future cash flow generated by the property. Again, a property that is demonstrating good income is always going to be favored in commercial real estate loans Texas over a property which is not providing as much income. Purchasing a property with a strong income history will increase your potential for a commercial loan at a good interest rate.

Know What Lenders Are Looking For

When you are seeking a loan on a commercial property, lenders are concerned with the financial stability of your business and also your creditworthiness. But they are equally concerned with the value of the property that you are purchasing. Not only are they looking at the current market value but they are also looking at the earning potential of the property.

Finding the Best Property for Your Needs and the Loan Criteria

When you are shopping for a commercial property the requirements are somewhat different than shopping for a residential property. The residential property must meet only your needs. But a commercial property is often more desirable if it meets your needs as well as the needs of your lender. That means that if the property can generate income to decrease the risk on your loan then it is a better choice. You might not have considered being a landlord but having tenants who are helping to pay your monthly mortgage can be a big advantage for you.

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Thursday, September 14, 2017

Think Like A Lender To Get Your Commercial Real Estate Loan Approved

Getting inside a lender’s head allows borrowers to understand how to get their loan approved. Consider risk management to be a top priority.

Acquiring capital through a commercial real estate loan is typically one of the first step a company takes in making a major real estate investment. That being said, this part of the process can be extremely difficult and time-consuming, depending on how a company goes about applying for a loan. Whether your company has struggled to get loan terms that line up with your company’s timeline or are having trouble getting funding in the first place, putting yourself in the shoes of a lender can help you get closer to your mark.

The following considerations are a few of the top concerns a lender will consider when deciding whether or not to approve a loan request and work with a new client. The better you understand a lender’s expectations, the better you can tailor your loan application to meet these requirements.

● Am I confident this borrower will pay off the commercial real estate loan off? First and foremost, the borrower is going to want to understand how much the business is making, and how much your business expects to take in as a return on the money your business is borrowing. The lender’s top priority is to make a profit on lending out your company’s much needed capital.

● What does this borrower’s credit history say about their reliability? With a closer look at your company’s credit history, a lender can determine how well your organization has handled credit. The higher your score, the more comfortable a lender will be with loaning out larger amounts of money at more reasonable interest rates.

● How much of their own money is the borrower willing to put up? The more capital your company is willing to put up in the beginning, the more invested your organization appears in the project. Showing a lender that your company intends to see the project through to the end despite any obstacles helps to build the lender’s confidence.

● Can the borrower offer me collateral to ease my concerns? Collateral offers a “just in case” scenario to lenders in case the borrower’s loan becomes delinquent. When companies offer up their own collateral, lenders will be more willing to negotiate on other terms. As far as your business goes, collateral will have to be something valuable enough that the lender accepts it as a consolation prize for your organization backing out on the loan. It may take offering up land, stocks or other real estate assets for your company to get the money it needs from a lender.

The Easiest Way To Think Like A Lender Is Learn More About The Industry

By keeping up to date with industry news resources and the latest expert blogs, your company stays in the know about important trends that impact loan terms.

Pick the brain of a trusted private lender for even more tips on where the industry is headed.

Traditional lending institutions can’t always give your company necessary insights (or loan terms). That’s when it’s time to turn to the services of an experienced commercial real estate loan specialist.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Maximize Your Commercial Mortgage By Avoiding These Common Real Estate Investment Flubs

Real estate is full of promising opportunities. Avoid these rookie mistakes to ensure your company gets a full return on its commercial mortgage.

Once your business has developed a detailed, data-driven action plan, it’s time to pull the trigger on the company’s big commercial real estate move. It’s important to remember that small mistakes can greatly impact the end value of a major investment. The same goes for commercial real estate investments. If your company wants to get the full value back for a commercial mortgage, it pays to plan for common hurdles. The more prep work you do before hand, the greater the return on your group’s investment.

What’s the best way to make sure these little mistakes don’t cost you hundreds of thousands of dollars? Be informed and plan ahead. Don’t let the following common commercial real estate flubs chip away at the value of your investment.

● Don’t Assume Banks Have All The Answers - Traditional financial institutions hold a great wealth of information, but remember that they are also businesses competing for your dollar. Unless you have a pre-existing relationship with a bank, they are only obligated to tell you so much about the market and what types of commercial mortgages are available elsewhere. Furthermore, their risk-adverse nature can make banks less knowledge of niche or emerging industries.

● Avoid Investing On A Hunch - Going with your gut will serve you well in numerous business scenarios. A major decision concerning real estate investment is not one of them. Your company is much better off relying on data analytics and fresh impressions of recent deals. Having a detailed strategy in place also makes it easier to correct your approach if your project isn’t showing immediate results. Investing on a hunch puts your company back at square one if said investment doesn’t pay off immediately.

● Select Properties Only After Extensive Research - Where you invest deserves just as much thought as how you invest. To this end, your company must dedicate significant resources to evaluating and vetting a property before selecting it for development. Failure to do so puts your business at risk for managing a snowballing problems down the road. These types of systematic issues tend to develop when major details about a property are overlooked. Make sure specialized professionals look over every aspect of the property before making a decision.

● Maintain A Student Mentality - The best commercial real estate investors never stop learning. The property market is nothing if not dynamic. Those who assume the status quo’s best practices will keep working five or ten years from now have unrealistic expectations. That’s why it pays to keep learning about the market and stay abreast of recent trends even after you’ve committed capital to your investment.

Investing Your Commercial Mortgage With Expert Help Limits Your Company’s Risks

Need to get into the commercial real estate game sooner than later? There’s no substitute for experience. If your company doesn’t have that know-how internally, it pays to reach out to an practiced professional.

A vetted and capable lending professional can offer the helpful inside information you need to succeed.

Connect with a reliable private lender for access to capital and a better understanding of the market where your business is choosing to invest.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What To Look For In A Redevelopment Project Before Taking Out A Commercial Loan

Location is vital when picking out a building for redevelopment, but that’s just the start. There are several factors to consider before your company is prepared to take out a commercial loans.

Innovative redevelopment projects remain the closest thing the commercial real estate industry has to a sure bet at the moment. It’s not surprising why these properties are so valuable, considering the old real estate adage that encourages investors to pick up the crummiest house in a nice neighborhood. When the location and fundamental are sound, all it should take is a few tactical investments and smart marketing to turn a struggling Class B property into a Class A asset.

That’s why so many companies, likely yours included, have mused the possibility of taking out a Commercial Loans to invest into an office, industrial or multifamily redevelopment project. Look for the following qualities when evaluating potential targets for investment. The more ideal the property you choose is for redevelopment, the more you stand to make back on your investment.

● Versatile Marketing Potential - The most suitable candidates for redevelopment are those properties that have the greatest potential for a wide variety of projects. An office building that could be sectioned off into multiple, smaller offices, for example, offers more flexibility than a single-floor industrial facility. Focus your investments on properties that give your business the most paths to success.

● History Of Income Generation - Chances are that if you are looking at a property for redevelopment, the building’s current income generation is not ideal. That being said, it pays to look into the history of the facility. Was there a time where the property was performing well? What kind of customers used to frequent the businesses that rented space the building? A once successful establishment is much easier to turn around than one that never attracted business in the first place.

● Established Traffic Flow - Location, as always, in extremely pertinent to real estate transactions. In the case of redevelopment, learn as much as you can about the businesses surrounding a potential property asset. Their customers make up the traffic flow that is already present near your investment. If your company’s redevelopment strategy targets these consumers, your company is already in a good position to get back the full value of its commercial loan.

● Removable External Fixtures - First impressions are extremely important, especially when it comes to getting individuals to take a second look at a struggling property. You want the building’s exterior to broadcast quality, innovation and class. The easier it is to provide a facelift, the more likely you are to make a big splash with your redevelopment project. Properties with removable external features are ideal for redevelopment because they can be quickly replaced and refreshed with modern, eye-catching accents.

Cost-Effective Improvements Allow You To Fully Leverage Your Commercial Loan

The more you understand the types of consumers that frequent the spaces near your investment property, the more you can tailor your improvements to their needs and expectations. Being able to narrow in your approach to improvements will help reduce costs.

Clever redevelopment projects promise serious return for savvy investors

Ready to invest in a prime redevelopment opportunity? Your business can get the capital it needs right now by working an experienced private lender.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

4 Tips For Maximizing The Potential Of Your Commercial Real Estate Loan

Acquiring capital is just the first step. Use these pragmatic strategies to make sure your company unlocks the full value of a commercial real estate loan.

A commercial real estate loan can create a long list of new opportunities for your business. However, just qualifying for a loan and spending the added capital does not guarantee a significant return for your company. Plenty of thought and planning must go into the process if your company hopes to get the full return on its investment.

When a high level of thought and planning is put into the project, your organization stands to see priceless benefits. That's why the following tips are likely to come in handy. Develop a detailed investment strategy by using the following guidelines and ensure your company capital is well spent for the rest of the year.

1. Make decisions with the future in mind - Remember that trends in commercial real estate can be notoriously short lived. Afterall, great ideas seem less impressive once the entire industry has caught on. Your goal is to anticipate trends, not to just ride the wave. That.means your company will have to make it a priority to analyze the direction of the market, make judgement calls about trends and take risks to stay ahead of the curve. The commercial real estate industry requires investors to be intentional, committed and always ready to chase opportunities when the time is right.

2. Develop a plan for marketing the property in advance - One way to get back the full value of your commercial mortgage is to start the marketing process as early as possible. If your company has developed a detailed strategy for the project, then enough information should be available to start tracking down potential tenants. The more demand you can demonstrate for your project, the better negotiating position you’ll be in when you speak with a commercial lender.

3. Understand all your possible expenses - Your company won’t be able to leverage a commercial real estate loan if the project is blindsided by additional costs from the very beginning. That’s why it’s so important to plan around extra costs associated with a loan like lender fees, appraisal fees and origination fees. Taking extra time to look over loan terms and ask questions to experienced commercial lenders will help ensure that no costs fly under the radar.

4. Rely on data, not your instincts - It’s important that you avoid getting wrapped up in reactional investments, such as making a shift in the company’s commercial real estate strategy based on a hot take from a cable news pundit. The reality is that no one can accurately predict the market, just make educated guesses and rebound with confidence when they miss the mark. Stick to your data-backed, meticulous strategy if you want to see a substantial return on your investment.

Remember These Important Tips Before You Start Investing Your Commercial Real Estate Loan

The more prepared you are, the smoother your company’s experience will be when it comes to borrowing and investing.

Reliable market information and the insights of a professional can make all the difference.

Don’t be afraid to lean on somebody who knows the market. Local private lenders are a great resource for helping your company stay up to date on the latest market trends.

Technorati Tags: commercial loans,commercial lending,commercial mortgage