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Choosing between conventional lenders like banks or credit unions and private commercial real estate lenders is a decision every investor will need to make. Understanding how each one of these two work is very important to make an informed decision. Here's an overview on how private commercial property loan lenders work.
#1 - Private commercial real estate lenders can work with average credit scores too If you are a borrower who has a bad credit score and cannot find any traditional mortgage lender to finance your commercial real estate property, private commercial real estate lenders might be your solution. With private commercial real estate lenders, the most important factor is the repaying ability of a borrower and if you have solid bank statements that can back up your loan repaying ability, your credit score is of less importance for your lender. #2 - Private commercial real estate lenders work much more flexibly as compared to conventional mortgage lenders As a matter of general rule, private commercial real estate lenders work much more flexibly and offer funding in lesser time window. They do not take long periods to go through your loan request and process it. They decide whether they want to find your loan or not rather quickly and go ahead with processing of your loan instead of keeping you on hold for a long time. #3 - A strong relationship with private commercial real estate lenders can go a long way in determining your long term real estate investment success The best part about working with private commercial real estate lenders is that they build a good rapport with their borrowers and act as constant source of guidance to their borrowers. Since they are in the industry of commercial real estate lending from many years, their expertise and experience is something you will hugely benefit by. Besides, having a good relationship with them will assure you that you can have your funds sources at the need of the hour without much questioning or time. #4 - Private commercial real estate lenders generally charge higher rates but make your funds available in much lesser time As compared to conventional mortgages, private commercial real estate mortgages carry higher rates but that's the trade off an investor will need to make in order to get a loan at much lesser time and without stringent loan qualification requirements.
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