Eager To Get Your First Commercial Mortgage? Here's What You Need!

As significant as the decision to go into business is, deciding to expand is even bigger. Not only are you taking on more responsibility, but you will need to take on a loan secured by your existing commercial property—or a commercial mortgage.

You have already done the hard part. A few years ago, you came up with a winning business idea, developed a business plan, obtained a loan, and opened your business. There were some growing pains along the way, but you powered through them.

Business is now going so well that you think it might be time to expand your operations. Maybe it is time to make your current place bigger or open a new office in another city. Whatever you want to do, there is one thing you are going to need—money.

Time to go to the bank and take out your first commercial mortgage, a loan secured by commercial property. There is just one question that has to be asked: How do you do it?

Step One: Talk To A Lender.

Before you start the process, it would be smart to find out what it entails. If you know a lender, make an appointment and talk to him or her. Find out what it would take to get approved for a mortgage in your area and what kind of interest rate you can get. This way if you don’t meet any of the requirements you don’t waste time and know where you have to be before you try again.

Step Two: Scope Out What You Want To Buy

After talking to a lender, you should have some idea of what you can get approved for. Talk to a realtor and ask them to point in the direction of locations you can afford that will meet your needs. They should also be able to tell you whether the seller is flexible on the price.

Before you move onto the next step, make sure you have your first choice in mind.

Step Three: Choose a Commercial Mortgage Lender.

If you already don’t have a commercial mortgage lender in mind, pick one out. Shop around a little to find who will offer the best rates and terms as well as the most money. Don’t rush the decision because it will affect how much you will end up having to pay back.

Step Four: Make An Offer

You know the location you want and how much you can get. Time to make an offer to the seller. Since you already have approval from a lender, you will be a more attractive candidate.

Step Five: Negotiate The Final Deal

As you negotiate with the seller, be sure and talk to your lender every step of the way. The quicker they are aware of things, the better. That way, if there is going to be an issue, they can inform you of it sooner.

Step Six: Time to Close on Your Commercial Mortgage

Once you have the deal done and approved, sign your commercial mortgage papers and get to work!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans Becoming Easier To Gain Approval For In The Self Storage Industry

During the recession, the self-storage industry became a good investment yet lenders still found it hard to approve commercial real estate loans for developers. As the economy has improved, lenders have become less stringent.

If you don’t follow the real estate market, then you are probably not aware that self-storage properties have become one of the most reliable investments in the market. Yes, those groups of buildings on the outskirts of town where people store all kinds of stuff have become great investments.

How? Well, because at one time or another everyone needs a little more space. But the self-storage industry has been around for decades. What is making it such a great investment now?

How To Make Money During A Recession—Self-Storage!

The recent interest in the self-storage industry began when the economy took a turn for the worse a few years ago. For a variety of possible reasons, people needed to downsize. That meant having to throw away some of their precious belongings or finding another place to put them.

That is where the self-storage industry came in handy. People needed space, and their local self-storage facility provided it. Even though the economy was not doing well and people did not have the income to spare, they wanted to make sure they had someplace for their stuff.

As some investors began to take notice of how self-storage properties performed they tried to enter the industry only to find it easier said than done. Lenders didn’t like the idea of handing out commercial real estate loans to build new facilities. It required more money and took more time for them to start seeing income generated.

They were willing to approve commercial real estate loans to renovate an old facility or convert an existing structure (i.e. old office building, former grocery store, etc.) into a self-storage facility. Borrowers did not need as much money, and it didn’t take as long in this scenario for a facility to start generating revenue.

From Recession-Proof To A Solid Investment

The economy is far from perfect, but conditions are nothing like they were a decade ago. There were some concerns that once the recession was over, self-storage properties would not perform as well anymore—but that has not been the case.

As the economy improved and people began to have more income on hand, they began to spend. As they did so, they accumulated more stuff that had to be stored somewhere. Some people just liked the idea of not needed as big a place to live without having to give up all any stuff. Facilities began to pursue small businesses as clients by offering them a cheaper alternative to a warehouse.

As the economy improved, the demand for self-storage space increased causing interest among investors to rise to a point where it became more affordable for a lender to approve a commercial real estate loan to construct a new facility rather than to convert an existing building.

If an industry is performing well—like the self-storage industry—lenders go from being apprehensive about approving commercial real estate loans to having no problem doing so.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans: Who Can Give Them?

Who Can Approve Commercial Real Estate Loans?

At one point in time, banks, relatives, and loan sharks were the only options when you needed a loan. Nowadays, that is not the case. There are several options available to people looking for commercial real estate loans.

Opening your own business can be a dream come true. No longer will you depend on the success of a company to keep the paychecks coming in. The success of the company is going to rely on you. No more blaming the boss—because the boss is you!

If you think you have a can’t miss idea in mind and have the desire and determination to see it through, the first thing you will need to do once you develop a business plan is to seek out a commercial real estate loan. So—where do you start?

Where To Go For Commercial Real Estate Loans

Most commercial real estate loans are made by commercial banks, but they can be had elsewhere:

Credit Unions: A credit union is a considered a financial cooperative that is owned by its members and controlled by an elected board. The purpose behind them is to provide members with competitive credit rates and other financial services—including commercial real estate loans.

There are currently more than 6200 credit unions with over 21,000 branches serving 100 million members in the United States.

Commercial Hard Money Lender: If business is bad or if you have poor credit, you can still get a commercial real estate loan from a private individual, mortgage company, federal bank, or an SBA lender. Terms can vary, and borrowers will need to secure the loan with collateral or an asset of value. Interest rates tend to be higher to compensate lenders for taking on the greater risk.

Life Insurance Companies: for smaller loans, businesses will typically go to a commercial bank, but for a larger, long-term (+10 years) commercial real estate loans, life insurance companies have become popular options. Companies using them will have to use something like an office building or shopping mall to secure the loan. They tend to be conservative when it comes to approving loans.

Commercial Mortgage Backed Security Lenders (Conduit Lenders): these facilities lend money secured by some form of collateral, typically a mortgage on a piece of commercial property. They will usually have fixed interest rates and for a term of 10-years, but are considered more complex and volatile.

 How Do I Find a Lender To Meet My Commercial Real Estate Loan Needs?

If you are ready to take the plunge to find a lender who gives commercial real estate loans, look no further than Level 4 Funding. Our dedicated team of commercial specialists know commercial real estate. We work in multiple states and multiple industries. With our connection, we are almost guaranteed to be able to help you find a loan product that meets your needs.

Call our office today to talk to one of our professionals about commercial real estate loans and you. You will be glad you called!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans: What Products Are Right For You?

Everyone expects to need a commercial real estate loan when they open a business, but do they know what kind to get? Knowing the types of loans available can be helpful to know as you get started and just in case something happens.

Deciding you want to go into business for yourself is a pretty big deal. No longer will you have to answer to the beck and call of a superior. You will be the superior that everyone else answers to, brings problems to, and expects to have all the answers.

Not only will you need to have all the answers, but you will need to have money. Getting a business off the ground takes money; money that most people will get through commercial real estate loans from their bank.

Yes, there are different types of loans.

Understanding the Different Types of Commercial Real Estate Loans

There are different types of loans you can apply for through your bank. Each has various aspects that are necessary to know and understand:

Bridge Loans are short term loans borrowers can apply for when they need cash right now to cover expenses. They are typically short-term loans through private lenders who will require proof of income and an excellent credit score.

Real Estate Purchase Loans are the loans you take out to purchase your building, store, or office. These can come with fixed or adjustable rates, will require the borrower to have excellent credit and significant savings in a business and personal account. The commercial property itself will need to be used as collateral.

Hard Money Loans are for when an infusion of cash is needed sooner rather than later, often to save the business or keep it afloat. Since they are given when a business is in dire need, they often come with a higher interest rate to compensate the lender for taking on greater risk.

Joint Venture Loan are what want if you are going into business with a partner. They are common when neither party can receive approval on their own but by applying together, they can make a better case to the lender.

Participating Mortgage is a type of loan gives the lender a chance to enjoy the success of the business. When payments are due, the borrower will send a percentage of the income earned as well as payment. This kind of relationship is more common between lenders and long-term, financially stable borrowers.

How Does Knowing the Different Type Of Commercial Real Estate Loans Help You?

When you go into business, you will have a plan, and a few contingency plans to help you deal with whatever problems or issues that may arise. More often than not, challenges and problems will require some sort of financial commitment.

If you have the cash on hand—great, but if not, it can be nice to know there are different types of commercial real estate loans that may help you.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans: From Start Up To Small Business

Is it time to expand your growing business? Then, let’s go over all things commercial.

By now you know the benefits of starting your company can be two-fold—you get to be your own boss and you are following your dreams. Well, the good news is if you are in the market for commercial real estate loans than chances are you are doing something right.  Generally,  the first thing you need to know about commercial real estate loans is  whether or not you are in the market for owner-occupied loan options or investment property loans.

Owner-occupied loan options typically refers to a loan for a commercial building that will have more than 51% of the space occupied by the owner (hint: since you are making the transition from startup to small business, owner-occupied loan options will often help keep the cost low due to the additional tenants). An investment property loan for a commercial building, multi-unit store front or office complex, on the other hand, can be used to buy or refinance. This particular type of commercial loan generally has higher rates and a balloon payment that tends to be due sooner rather than later. But, nevertheless, an investment loan is just that an investment. In other words, you would typically consider this loan option if you were not interested in occupying the property.

Generally, when making the transition from startup to small business, as previously mentioned, it is all about the owner-occupied loan options. Thus, with that being said, the next step in all things commercial is deciding if the benefits outweigh the costs (literally).

The Benefits of Owning Your Business Location

If you have already done a little bit of research then you are more than likely aware of the numerous benefits of owning commercial real estate such as the lucrative tax advantages, asset appreciation, leverage, high cash yield and of course a clear indication of overhead costs i.e. your business is essentially rent controlled. These benefits are even more lucrative for a startup or small business as owning your business location will allow you to create capital for a variety of business expenses as well as foster an image of progression and durability in your brand. The best way to purchase commercial space is with commercial real estate loans.

Of course, that’s not to say there are no disadvantages to owning your business location, especially when you are first starting out. Remember, commercial loans involve additional costs and fees, title work, appraisals as well as full documentation. In fact, many startups and small businesses simply may not be ready to take own the financial responsibility (various fees, depreciation, borrowing capacity, etc.) or the property management and maintenance that comes with commercial ownership. Consequently, it is always in your best interest to weight the pros and cons before you make your next venture.

If you are ready to take the next step with commercial real estate loans, call our office today!

Well if you decide commercial real estate loans are right for you. Then your next step is to reach out people that know the business. This means working with a real estate company that can not only meet your needs but one that ultimately understands your needs. 

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans: Which Loan Is Right For You?

There are a multitude of commercial real estate loans. Are you sure you found the right loan for your business venture?

If you haven’t done your research yet, it may behoove you to know that there are several different types of commercial real estate loans. However, our focus will be on joint venture loans, participating mortgages and your standard real estate purchase loans. These particular commercial loans tend to be the most common choice when it comes to business ventures. Thus, with that being said, let’s go over what each of these loans can do for you and your next business venture.

For starters, a joint venture loan is what you want when all parties (generally two partners) are willing to share equally in the losses and profits of the property. Moreover, this particular commercial loan is extremely beneficial to those parties that cannot or may not be able to qualify for financing separately. A real estate purchase loan, on the other hand, requires one party or rather one borrower with excellent to near perfect credit along with the saving to back it up. Additionally, when it comes to collateral, in general, lenders tend to expect more with these purchase loans.

Lastly, participating mortgages, in essence, are when your joint partner is actually your lender. In other words, the lender receives the standard monthly payment plus interest, but because the lender is also a partner they ultimately share in the commercial property’s proceeds or income. This third option is definitely something to look into if you have potential tenants with financial stability and long-term goals.

How to Decide What Commercial Real Estate Loans You NEED!

So, now that we’ve gone over some of the commercial loan basics, it’s time to see what works best with your business plan and overall goals. Of course, additional research is always key to finding out which type of commercial loan will ultimately work best. But, nevertheless, when it comes to picking and choosing between the above-mentioned commercial real estate loans clearly the best course of action is to sit down and go over your credit score, your available capital or rather collateral and what your long-term purpose is for your future commercial property. Obviously, if you do not qualify on your own a joint venture loan would be in your best interest or you may even consider a participating mortgage, especially if you are interested in an office park. Ultimately, If your credit score is well into the 700s and you’ve got extra savings just laying around well then you have no reason to fear the all mighty real estate purchase loan.

Is Rotten Credit a Factor?

If you are like most business savvy people and do not have the credit scores that dreams are made of that’s perfectly okay. The reality is you still have other options, even more than we’ve covered. So, do not let rotten credit keep you from reaching your dreams or from taking your business venture to the next level. Remember, your goal is to pick a commercial real estate loan that works for you!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.

Commercial Real Estate Loans and Lenders: What You Need To Know

Selecting the right lender for your commercial real estateloans is never easy. But with a few key questions you can narrow down your options and ultimately choose the right lender for you.

Find the right lender for any commercial real estate loan is a big deal. It’s a big deal because these particular kinds of loans are truly not your everyday kind of loans. In other words, most lenders have ample experience in residential loans as everyone needs a home. But, of course, not everyone needs a business or an investment property and to each its own. Nevertheless, the point is that the majority of big lenders are better versed in all things residential.  Therefore, it is your best interest to find a lender that has a substantial amount of experience with commercial real estate loans.

Well, at this point, you may be wondering, just how exactly are you going find a lender that specializes or rather has the right amount of commercial loans underneath their belt? The trick is to ask the right questions. Asking the right questions may sound like a simple solution to ensure the future financial security of your company or business venture, but, the truth is it’s all in the details.

For instance, you may find a lender that has extensive experience with commercial real estate loans, which is great. But, stop and ask yourself, does this lender know my market.  In other words, your potential lender has extensive experience with commercial or rather non-residential loans, but in what market? You see details, they matter. Thus, with that being said, let’s go over a few more key questions that will help you find the right lender for you and your specific market.

Helping to Narrow Down Your Lenders

Once you determine if there are lenders that have the right experience in your particular market, it’s on to the tougher questions such as how much capital does your potential lender have?  This matters because you do not want to be just another number to your lender i.e. you want a lender you can work with who remembers your name and your business idea. 

Additionally, you should ask your potential lender about their borrower requirements and commercial loan services offered. Know what’s expected of you as a borrower (how much collateral do you need, what’s the policy on late payments, etc.) and what you can expect of your lender (Are revolving lines of credit available? Are there multiple locations and are they FDIC insured? ) is what it’s all about. Moreover, if you like what you hear you are that much closer to your future lender.

Risk Less with Commercial Real Estate Loans

Lastly, if you are a small business make sure that you are in the best the position financial before you decide on a lender for your non-residential loan. It may sound repetitive, but, for you to be seen as less of a risk to your lender and for your commercial property to truly be profitable for you, it helps to be financially stable or to have investors that are financially stable.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.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.