The process of obtaining a commercial mortgage is not as simple as one might think. Knowing a few bits of insider information will help you to manage your expectations and have more success when applying for a loan.
Beginning your search for the perfect commercial mortgage can be a bit of a disheartening experience. You quickly learn that the process is long and tedious at best and frustrating and disappointing at its worst. But having realistic expectations and a little bit of honest information about the process can be very helpful in relieving your anxiety and getting you the loan that you need. So listen to the promises of potential lenders and then temper their time estimates and other information with some well-known facts from industry professionals.
Time can be a critical factor when you are seeking a commercial mortgage. After all, you either have a need for a property or have found a property to fit your needs and you are ready to make the purchase. So the last thing that you want to learn is that another company or investor has bought the property out from under you. In an effort to be expedient and efficient you are polling lenders to see who can work within your tight time line. And the canned response will be around a month, tops. This statement is made with a smile and possible chuckle that almost certainly is revealing a bit of fabrication. The cold, hard truth is that processing a commercial loan can easily take over 45 days and many reach almost three months. Understand that the process is slow and you will not be able to change that fact.
Knowing that it can take up to a few months to complete the process, also understand that it can take weeks before you even get the nod that you are approved. The flip side of that is that you wait weeks to learn disappointing news and then you are forced to begin the process again with yet another lender. So when time is of the essence, you are wise to start the process with a few lenders and see who meets your timeline and who is actually willing to offer you a loan.
Saving Time and Money
Knowing that you are applying to several lenders for a single loan, it can be tempting to look for ways to save on costs and possibly speed up the process. Many borrowers want to pay out of pocket to have the property appraised and then submit that document to each lender. The idea is reasonable but in the end it is not cost efficient. By law, each lender must order an appraisal themselves so your appraisal and the fees are wasted.
Do Your Due Diligence
Begin the process of seeking a commercial mortgage with as much information as you can possibly gather. The time that you invest in learning the process and the technical jargon of the commercial loan industry will be rewarded with a great return on your investment. You will have realistic goals and timelines throughout the process as well as less stress.
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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