It is no secret that the Texas Commercial Real Estate Loans landscape has changed a significant amount in the last few years. Lenders have not only gotten more conservative (even non-traditional lenders), but there are also numerous regulations now in place.
If you are pursuing a Texas Commercial Real Estate Loans, you are right to be cautious. It is, after, a lot of money and you are depending on your ability to increase your profits in such a way as to be able to pay it back quickly. This does not mean, however, that it is not something that is achievable.
Qualifying for a Texas Commercial Real Estate Loans is not an easy process, but if you are already worried about whether or not you will qualify, then you are on the right track. Not to worry further, but to pay enough attention to detail to ensure your success. You will also have to be honest with yourself to make sure that you are putting your efforts in the right direction
The first thing to do is to take a good look at your financial situation. The first thing that you are going to want to examine is your credit. Traditionally, lenders look for a credit score of the borrower to be at 680 or higher. If you qualify for this, then you are already off to a great start. This means that you have the option of choosing from traditional and non-traditional lenders. If your credit score falls below this, all is not lost, but you are going to need to make up for lost ground in other areas and you are very unlikely to obtain a loan from a traditional lender.
The next thing that you must examine is your ability to repay the loan. From the standpoint of a small business, this means taking a good look at your cash flow. The bank doesn’t necessarily care about your profit, or what you think your profit might be, they care about whether or not you have enough cash flow to have a capacity to pay them back over the course of the loan. For the most part, the net operating incoming must be at least 25% higher than the proposed payment. If you are not able to sustain this type of cash flow, then you may need to explore other options.
Finally, you will need to examine the type of collateral that you might be required to put up to secure your Texas Commercial Real Estate Loans. The role of collateral has also changed significantly in the past decade, but lenders have changed their strategies due to the fact that many of them were left having to sustain huge losses after the real estate market plummeted. To reassure lenders that they are making a solid investment, collateral is used as a way to secure the loan. So you will need to examine your assets in comparison to the amount you are looking to borrow. Do your assets only cover 5% of the expense? 25%? More? No matter what it is, there are still options available, but you need to be realistic with the financial situation so that you can identify the correct avenue.
I have good credit, excellent cash flow and sufficient collateral, so what do I do next in my pursuit of a Texas Commercial Real Estate Loans?
Keep all of your paperwork in order and start looking! Finding the right lender for your loan is going to take some work and it will definitely take time. You might even want to consider hiring a broker to help you find the most amicable repayment schedule and terms for 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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